The Worst is Behind US - Not

Artcore

这是我今天看到最有趣的文章.

News of the worst kind - By Al Lewis (From BusinessSpectator.com.au)

Dow Jones
If you are in charge of calming panicked investors, never, ever say "the worst is behind us."

"The problem ... is for the most part behind us," Merrill Lynch CEO John Thain said in January.

Now he's reportedly preparing to take another $US5.4 billion write-down on mortgage-backed securities.

"The worst is behind us," Lehman Brothers chief Richard Fuld told shareholders in April. Then in June, the firm reported its worst loss ever, $2.8 billion.

"The worst is definitely behind us," Bear Stearns chief financial officer Samuel Molinaro said on an investor call in September. Bear Stearns collapsed in March. Apparently, inclusion of the word "definitely" is the kiss of death.

"The worst is behind us" has always been a wishful phrase, if not a blatant manifestation of desperation. President Nixon said it in 1974, despite runaway inflation and rampant unemployment. Mikhail Gorbachev said it in 1986 when the casualties from Chernobyl tallied less than 10.

Not everyone who uses the term is a liar. Delusional optimism may be an instinctive response to the impending loss of great wealth or power.

"We think the worst is behind us," said Fred Joseph in 1989, then-CEO of Drexel Burnham Lambert. Eventually, though, junk bond king Michael Milken's insider trading scandal and the 1987 stock market crash led to the firm's demise.

People like to believe that long-established institutions will always be with us, yielding the sometimes false conclusion that whatever just happened must have been the worst.

"We feel the worst is behind us, and the future looks brighter for our company than it has for a long time," said C. Edward Acker in 1983. He was CEO of an airline. You might still remember it – Pan Am.

You might also remember Midway. Its chairman, David Hinson, said "the worst is behind us" in 1991, the last year of the Chicago airline's life.

No board of directors is going to pay a CEO to believe the worst.

"Clearly, the worst is behind us and we are seeing progressively better results each month," said Douglas McCorkindale, then-CEO of Gannett, in 2002.

Economists are often paid spokesmen for industries, too.

"The worst is behind us as far as a market correction," said David Lereah, chief economist in 2006 for the National Association of Realtors. "This is likely the trough for sales."

Former Federal Reserve chairman Alan Greenspan and General Motors vice chairman Bob Lutz also declared the worst had passed in 2006.

"In five years GM is going to be better off than it ever was," Lutz told the Chicago Tribune. So far, GM stock is only down about 40 per cent since he said it.

It's scary how many economists and market mavens declared that the worst was over after the Dow Jones Industrial Average slid below 12000 in March. Now the Dow is even lower.

If you are managing money, what are you supposed to tell investors? Sell?

Bill Miller, whose Legg Mason Value Trust got a 19.7 per cent shave in the first quarter, wrote a letter to his shareholders in April: "For planning purposes, here is my forecast: I think we will do better from here on and that by far the worst is behind us."

Some people are far more cautious when they wield these words.

"I don't think we're out of the turbulent water yet," Richard Yamarone, chief economist at Argus Research, told Investors Business Daily in May. "But I do believe the worst is behind us."

When CEOs are not trying to publicly defend their stocks against bearish sentiments, they will often admit that the worst is not behind us.

In a recent survey of CEOs by Chief Executive magazine, only 19 per cent said "the worst is behind us." Nearly 36 per cent said "the worst is yet to come." And more than 43 per cent said "the worst is happening right now."

Contrast that to what Enron's Ken Lay said in 2001: "We have faced a number of challenges but the worst is behind us, and the business is doing great."

Lay suffered many misfortunes after uttering these fateful words, including a heart attack in Aspen, Colorado. He died in July 2006 between his conviction and sentencing on fraud charges.

It's difficult to say what happens after we die. But if there is indeed an eternal hell, then maybe the worst is always ahead of us.

黑山老妖

Moral of the story: don't listen to anyone calling the bottom of the market when they have vested interests...
(monkey13)
There are no accidents.

Devil_Star

金融市场总是充斥着NOISES， 说话的人都不用负责， 说错了躲起来一会儿， 迟些大家淡忘后再冲出来说， 连续说上几次， 总有一两次是对的吧， 那时就成为GURU了～