There is more than one way to understand the term defensive investing. Typically it means buying stable companies with low growth, in other words seeing it from the growth side of the equation. But defense can also be seen in terms of the loss side. Defense, other than focusing on the growth side, can be seen as buying companies that can withstand the bust part of the business cycle. So rather than seeing it in terms of how much you can gain, you’re calculating in terms of capital preservation versus what other companies would lose.

GVC would not classify as defense in this way because it is a company built for booms. Aggressive business strategies, high leverage, risky but fast-growing markets. As long as the Merry-Go-Round continues to turn, GVC can continue to grow. Indeed it has, at least in its top line, and in some key important areas. Mobile sports wagers are up 55% as of last interim report. Casino and games revenue has almost doubled. There are things to be positive about with GVC and that cannot be denied. But what if the Merry-Go-Round stops?

When that happens, everything is reversed, not just for GVC, but the way investors look at stocks becomes fundamentally shifted from the foundation. It’s no longer about which companies can grow, but about which companies can survive. During those times, the healthiest companies financially go down less, and the leveraged ones trying to impress with top line growth are the ones that get smashed.

However far away the next downturn is, when it does happen GVC will be ill-prepared for it. Turkey is continuing to unravel as the regime there becomes more and more authoritarian and currency continues its collapse, Germany is at the core of an EU that continues to disintegrate as anti-EU forces are popping up everywhere and it looks like we’re going to have a bunch of Donald Trump-type heads of state in Europe soon. Not to mention the US itself is about to hit a $20 trillion debt ceiling next month that Democrats will use to hurt Trump and many Republicans elected on the premise of fiscal conservatism and who actually hate Trump will not want to vote for a debt ceiling raise either.