Hugh Hendry is way overrated. I don't know where he gets his reputation from other than his loud mouth.
I got curious, so: "Hendry avoided risky areas in the run-up to the financial crisis, a strategy that was controversial with some clients at the time. But as a result the worst ever year for his flagship Eclectica fund was a 3% drop while it returned more than 50% in its best year. It has generated an average return of 11% since its launch 4 years ago." http://www.heraldscotland.com/busin...offshore-to-avoid-brussels-penalties-1.993348
The initial post said Hendry sold out of his investment. Did he sell at a profit? If the answer is yes, why did he make a horrendous call? Is there a problem with making a profit. As to the rest of your theory, pretty much every response on this thread blows up your points. At the right price, pretty much any business can be a good investment. Berkshire Hathaway was a textile manufacturer in New England for crying out loud. I believe Buffet also bought a trading stamp company. Now that was a dying business, but Buffet made a fortune with it.
The figures mean in the other 2 years (out of 4 the fund was around) the return was in low single per cent, which is far from spectacular. Something like year 1: 2% year 2: 50% year 3: 2% year 4: -3%
Bet Hendry and his gang got paid well though. See, it's not so much about making your clients' a good return as long as you get paid first.
What has any of that got to do with whether it was a good call to invest? They paid peak cycle earnings for a business in secular decline. The cashflows of the business have been collapsing, it has lost billions in just the last 3 years. The investment has been a total disaster.