Sunday, March 21, 2004

Early Signs 

We went hiking in the 2000-acre reservation that borders the town in which we live. There were early signs of Spring. Last week's snow was melting rapidly, and mud was everywhere. The waterfall down the hill was running full tilt. Our dog, normally a house animal, was pulling wildly in every direction and getting filthier by the second. He got a bath when he got home.

It has been a long winter. It started with deep snow followed by bitter cold then temperate weather when daffodils began to grow, then two snow storms to let everyone know nature controls events. It is interesting that we invest billions in weather forecasting, but there is little we can do to control weather. All we really do is track weather's vicissitudes.

In many ways, I think business is the same way. I have listened to too many CEOs complain about their companies' stock prices after all the work the CEOs have put in to raise them. In some seasons there is mud, and one can little about it. A CEO I respect once said that he wasn't going to pay that much attention to stock price. He was going to continue to execute. Sooner or later, the stock price would catch up. That is the best attitude to take.

Other than correcting error, there is little one can do to turn around journalists or analysts who don't like a company. It is a matter of performance and time. If company continues to perform and one keeps journalists and analysts apprised of success, sooner or later someone sees light. Forcing the issue as some companies do can backfire or push the companies into unhealthy decisions that harm performance eventually. That is what happened during the Bubble era.

To every season there is a time.


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