By DAVID MOON, Moon Capital
February 18, 2007
We've had some fairly warm spells this week, with the
temperatures climbing into the 60s before taking a dive as we approached the
Expect to see some retailers blame
their first-quarter results on the weather.
As Gilda Radner's character Roseanne
Roseannadana used to say, 'It's always something.'
It's nice to have excuses. It keeps
us from having to take responsibility for our actions.
Some people actually begin to make
excuses before the bad thing happens for which they are making the excuses:
'Well, if I don't win, it's not a huge deal. My racket's not as big as his, and
besides, his shorts are whiter than mine.'
It happens in business, as much as
or more so than anywhere else. Many of the excuses are merely euphemisms for the
real reason a failure occurs.
After the stock market's technology
bubble burst in 2000, many companies blamed their eventual demise on a decline
in their stock prices. When a company blames its business failures on its stock
price, that's just another way of admitting that it's not making any money and
doesn't expect to any time soon.
I always love it when a retailer
blames poor results on some calendar anomaly. If the number of weekends between
Thanksgiving and Christmas is four instead of five, some retailers act surprised
if their numbers disappoint the analysts in January.
someone please buy these folks a calendar?
When a retailer blames some calendar
oddity for poor results, it really means that its buyers made terrible decisions
and bought a bunch of junk that no one wants to buy.
Another handy excuse for almost
anything is the Federal Reserve Board. This was especially true when Alan
Greenspan, who inspired his own noun'''Greenspan-speak'''was in charge.
Few people could understand what he
said, so you could blame anything on him. 'Our sales were off this year, but in
light of the Fed testimony in front of Congress this summer; that can hardly be
a surprise.' 'Well, you heard the man; we should have expected poor sales of
rubber snakes.' 'I think the Federal Reserve Board was predicting more
quarterback sacks this season.'
The next excuse de jour will be the
housing market. As housing prices soften around the country and the financing
market continues to soften, expect a host of struggling businesses to lay the
blame for their fortunes on this doorstep.
No matter how convincing the
argument, however, don't let anyone convince you that cell-phone or toilet-paper
sales are correlated with housing. That's a load of', well, that's just not
David Moon is president of Moon Capital Management, a
Knoxville-based investment management firm. This article
originally appeared in the News Sentinel (Knoxville, TN).