Wednesday, October 05, 2005


The ultimate game of perception is Wall Street. Investors can no more predict the future than you or I. They can worry a lot or be confident and trade or not, but that doesn't change outcomes. I have often wondered why CEOs get hot under the collar about what Wall Street thinks. Sure, much of a CEO's compensation is based on stock value, but the only thing CEOs can control is what their companies do and not the price of their stock. It doesn't take much to look about and find good companies trading at a low P/E and lousy companies the hot stock of the moment. If Wall Street had any rationality at all, that wouldn't happen. But, it doesn't. It's a perception game of the worst kind where rumor and fact mix indiscriminately.

It is hard to imagine any company these days without a proactive investor relations department to guard its image on the Street. But, it is difficult to accept that CEOs can live or die by stock price when they are doing good jobs otherwise.


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