In short: "The opportunity persists even if the company doesn't." When Fleetwood and Palm Harbor went bankrupt in manufactured housing, both were bought by Cavco — "so we bought Cavco." His rule: follow the next buyer that consolidates a stressed industry.
Cavco makes manufactured (factory-built) homes. Robotti uses it to show one of his core rules: "the opportunity persists even when the company doesn't." When two manufactured-housing makers (Fleetwood and Palm Harbor) went bankrupt, Cavco bought them both — so Robotti bought Cavco.
The idea is that a beaten-down, distressed industry still has real long-term value; the trick is to follow whichever survivor consolidates the wreckage and emerges stronger. It's a historical example of the method, not a current pick here.
20:28been too soon and they have gone bankrupt. But the opportunity in that business, in that industry, persists in a different form, and therefore we make sure we follow the next buyer. So in manufactured housing, when that happened in the early 2000s, when Fleetwood went bankrupt and Palm Harbor went bankrupt, and both of those successively were bought by Cavco, well, we bought Cavco. So the opportunity continues to persist even if the company doesn't. And the opportunities become substantially greater when that stress is happening, and the economic response to stressful situations in poor economics and industries. When Tidewater went bankrupt I bought Tidewater out of the bankruptcy, again, and loaded up on it.
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Verbatim excerpts from the public transcripts (auto-pulled at each mention's timestamp, lightly cleaned). Timestamps link into the video; "source page" opens that commentator's full analysis at this row. Click a mention's header line to expand it (one open at a time). For personal study — not investment advice.