America is the “bigpay day” economy. we used to make stuff world markets wanna buy. now, we just shuffle debt and stocks

put a fork in her, it’s only a matter of time.

ROFLMFAO!!!

I can see that you’re going for the “Wall Street BFF of the Year” award Bing! I’m lucky enough to work for a big public company that’s an industry leader and continually flips the bird to the “analysts” (I use this term loosely since most couldn’t read a balance sheet to save their lives). Most of the time, we watch our stock price and wonder if anybody buying it actually has a clue. Thank you for giving us the backup for our argument that absolutely, unequivocally, the analysts don’t know (insert expletive of you choice here).

Welcome Back! Here’s to the Bing we all know and love. You framed this one perfectly (love the notes, too).

Jack in CA…I know you’ll have much to say…

You must have been depressed last week with the heavy work load and all.

Now you’ve depressed ME.

Why doesn’t General Electric follow your advice!

Yes, that’s about how I see it too. The Wall Street analysts (to use the term generically) live in a closed world and talk only to themselves. They are creatures of fad and fashion, and are as subject to emotional highs and swoons as any self-respecting 13 year old. As a matter of fact, that’s EXACTLY who they are like. Just don’t ever give them the keys to the family car. Too bad they too often hold the keys to the market. When will the ADULTS get control again?

I am not an expert at business analysis nor at witchcraft. Does it explain why I don’t see the common-sense gene ticking in Wall Street’s brains?

Bing,

Simmer down my friend (I use friend loosely as we have never met). You seem to have had a rough weekend. Downgrading a stock that has had a great run is in reality a very good idea. If the stock has hit your tgt and you don’t think it will go higher because you have baked in all that is good into your valuation, you have a duty to downgrade. This idea that stocks can’t run forever is called mean reversion and is intellectually honest.

The rest of your ranting on what Wall Street wants is interesting though. As someone who manages money for a living, I have some observations. First, Wall Street wants companies to maximize their (the investors) returns. So it comes down to this, if I can get 25-30% 3-4x’s a year by forcing short term gains from companies I should do that. This leads to a short term focus (it also increased your mistakes in my view). This means that the market is really no longer efficient in the short run because ST investors aren’t focused on value creation. This causes Wall Street to call for the things you mentioned below. I would change a couple of things because you have applied many strategies to companies that are in different stages. For example:
Growth: do 1, 2, 3, and 7 (4 I don’t get)
When idiots punish your stock for investing and you can’t do 1,2,3,7 you should 8 – sometimes mature companies should do this.
9 is the game if your model needs scale and you can’t get there, you have a good technology but you can’t market it, etc…
Regarding 10 – I learned all 3 were stakeholders; unfortunately, you get sued more often from the shareholders lead by class action attorneys, so I would argue JD think has caused companies to focus on the biggest pain point, investors, then customers, and finally employees vs. equal stakeholders.

I do believe that over time, those willing to time arbitrage this volatility and invest in good companies will generate returns beyond their peers.

Nonsense. This “Wall Street” mentioned is comprised of shareholders(company owners) who have invested capital(real money) and want return on their investment. Nobody will try to tell you what to do with your house, car, lawnmower or dog(things you own) but somehow it is OK to tell people what to do with their investments.

Zing, Bing, Zing . . .

You just summarized the last 100 years (perhaps longer) of corporate life in America. In a single column, with exactly 10 points. It’s perfect prose, with a purpose. Clearly, this should be required reading for every first year MBA student, everywhere. And every new-hire orientation (since so many don’t go to business school). If only Machiavelli could have read this, he would have been fascinated, and probably would have added a chapter about it in “The Prince”.

they say inside trading is noy allowed? well how come the in the know traders are at least one week out ahead of the small investors?
hedge funds and large money people run the market not the hard working investors that have a 401k

Bing,
Corporations don’t exist to provide service to customers or jobs to employees. They exist to create wealth for shareholders that risk their money investing in them. We leave providing employment and service to customers (maybe) to the government.

11. Guidance! It doesn’t matter if you beat analyst estimates by 1000%, if you don’t promise the moon and the stars, your stock will go in the toilet.

“Nobody will try to tell you what to do with your house, car, lawnmower or dog(things you own)…”

Actually, that’s not exactly true. Some companies will tell you who you can and can’t associate with. They will monitor your public communications, even if done on your own time. They do tell people that they must behave in certain ways, even when not at work (go to gym, lose weight, stop smoking).

So, maybe it’s not the dog or the house or the lawnmower, but SOME companies get their hooks into people in very personal ways.

“They exist to create wealth for shareholders that risk their money investing in them.”

That doesn’t sound so different from the mafia. Shake down your clients and employees for every penny that they have to give. After all, they don’t matter if the investor isn’t getting their cut.

To those who understand “IT”???

The on-line investment book store contains 2,142 books on “INTRODUCTION TO INVESTING”.

The S.E.C. spells out the following types of “INVESTMENT FRAUD”: 1. Biased investment advice. 2. Unfounded investment advice. 3. contradictory investment advice. 4. Continuing risk. 5. conflict of interest. 6. Churning. 7. over concentration. 8. unsuitability. 9. Misrepresentation/Omission.

S.E.C. guidelines for stockbrokers?

1. Fair dealing. 2.Best execution. 3. Customer confirmation rule. 4.Disclosure of credit terms. 5. Short sales. 6. Trading during an offering. 7. inside trading.

Investing is simple. Just stick to the few guidelines mentioned here and enjoy the grandiose thoughts of “RETIREMENT”.

hey bing, if that’s the case then Wall street can kiss my ass!

Next I suppose the government will tell me there is no inflation!

Hint, Hint for your next rant.

Is there a solution or are we doomed to self-destruct?

Wall street wants Govt/taxpayer bailouts when things are tough,
and they want the Govt out when things are great. I dont trust any of them nor the banks. Go gold..real money

With 35 years of experience as a broker and trader, this is exactly what happens every day. They do it for personal greed and the whole system of analysis is for this reason and not for the good of the investor. Why punish a stock 20-30% for earning money, just not quite as much as last year. Buffet has it right and does not pay attention to this croud. We have to do the same.

I couldn’t agree with you more. It’s the same scenario in the UK.

I’ve never understood the mentality of slating a company for making good profits under difficult market conditions (even though the profit may not match up to the previous year). Marks and Spencer anyone?

FINALLY FINALLY FINALLY!!!!!!!!

SOMEONE GETS IT!!!!!!!!

Amen brother – and government is no different.

To JK from Gove City Ohio, I’m a buckeye too – sooo I thought I’d clear this inflation thing up for you. You don’t have to wait for the gov’t to tell you that there is NO INFLATION – I’m now telling you. Inflation occurs when you have too many dollars chasing too few goods. What we have is statnated income – or lower income – the average worker hasn’t seen an increase in earnings since George became our ruler. However the cost of goods and services have soared to new heights – that’s not inflation – it is a tax on what little income you have.
Born, raised and a victim of buckeye public education. Wouldn’t trade it for the world.

When I was a teenager (the early 1970s) I read about a saying:
“In God We Trust,
In Wall Street We Bust.”

Which is what the Columnist is pointing out. Let’s call it the Bing Bang theory.

I’ve never worried about the “Separation of Church and State” issues with the “In God We Trust” because of the above saying. After all, Jesus went after the moneychangers only in the temple, not in the government.

Wow! Finally a concise summary of the vapid culture that is Wall Street.