SXT - Why WD-40's Recent Credit Revolver Max-Out Exposes Greater Risk This Cycle Vs. The Past: 55%-60% Downside Risk

First off, we hope everyone is staying healthy and well during these unique and challenging times.

The depth and magnitude of our current economic situation is unprecedented. Yet, if you've been a loyal Spruce Point follower over the years, you'll appreciate why we've been skeptical, hard pressed to buy stocks at inflated multiples, and not surprised by the depth and speed of the stock market rout. We believe it's a function of too much leverage with too low interest rates, capital misallocation, and a decline in mechanisms that lack human judgement in the financial system.