If you want t make a good decision the best way is to gather all the data you can, analyze it and evaluate the potential outcomes choosing the option that results in the most overall benefits.
Or you can throw darts at a dartboard.
Sometimes the second method works just as well because today's data may not be tomorrow's data.
If you think about the business failures we see, and some American icons are falling by the wayside, you wonder how did they let themselves get so bad.
Surely when a company like Sears or Toys-r-Us was riding high, they could afford some of the best talent or hire consultants to make good decisions.
Still they obviously made bad ones while other companies made good ones.
Its likely that every decision was supported by a significant amount of data and demonstrated how it was going to lead to long term success.
It didn't.
I don't have all the data I would need to analyze why they failed, but I suspect it was related to the usual culprits, taking n debt for a project that didn't pay off, say the acquisition of K-Mart.
Sears actually saw its competition growing and knew how they were doing it.
It was at first Wal-Mart and then Amazon.
Their attempts to compete were at best misguided and ineffective as they lost market share and had higher and higher fixed costs.
Toys-r-Us faced the same competition and failed faster.
There are a lot of other details that will come out but ultimately the final nail is always when you don't have enough free cash to pay your debtors.
Decisions made years ago failed to accurately predict the future. They often do.
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