With some people, it's always something

By DAVID MOON, Moon Capital Management
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 weekend.

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.'

That guy's already lost.

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.

Would 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 true.

David Moon is president of Moon Capital Management, a Knoxville-based investment management firm. This article originally appeared in the News Sentinel (Knoxville, TN).

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