Tuesday, August 04, 2009
Business Lesson
As long as costs can be cut faster than falling profits, anyone can fake a recovery long enough to dump their shares of stock in the company before the final implosion. They did that at Enron and Worldcom, but they cut their costs so much it critically impaired their ability to operate and they got caught.
The trick is to always have more expenses than necessary in reserve exactly for this situation. Thus you can have a larger window of opportunity to pull the wool over the eyes of the little Day Traders, Red Hatters, and people who watch the sucker network: CNBC.
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