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When the Corporate Teat
Goes Dry
By Bill Zahren
(Posted 07/14/02)
Everything was fine until
someone killed the corporate Cash Fairy. Last anyone saw of
her she was nothing but a pair of booties and crumpled wing
dangling from the snout of seriously pissed Wall Street bear.
We're taking the Cash
Fairy's death badly. We've grown surly. We're throwing our
toys. We've suffered intense hissy fits.
We miss the corporate
largess that gave the Cash Fairy her life force. Americans
had no problem with the average CEO making $10 million
a year, while the average employee made about $25,000
as long as we got a large, stock-market-based piece of the
action.
It was as if the Cash
Fairy just dropped generous gratuities into our portfolios
every quarter. We opened our investment statements with Christmas
morning giddiness. Stock Market Santa! Is this a great country
or what?
Then the bear ate the
Cash Fairy and Stock Market Santa got shot down by a Stinger
reality missile. Not only did the corporate teat go dry, but
the big business sow rolled over and crushed the investor
piglets. Our quarterly statements became nightmares of negative
and red numbers. Like junkies who run out of junk, we got
ugly quick.
The lesson for corporate
raiders: as long as a lot of people are in on the pillage,
we say “FREE MARKET” and cash the checks. But when people
stopped getting a taste of the cash, we became aghast at the
"greed" and wanted to toss everyone in jail.
What hurts the most is
that all the safeguards we were supposed to trust for “prudent
investing” turned in unison and crapped on us. The big-deal
accountants -- that crack, ever-vigilant cadre of golfing
buddies -- were a bit busy suckling both sides of the teat
to let us know that some company balance sheets were Tolstoy-level
fiction.
Great. Now the .01% of
the population who could make any sense out of corporate financial
statement gibberish is lying to us. Perfect.
Then the stock analysts
stepped up and pissed on our heads. At least they were tan
from the most recent corporate-sponsored junkets to Maui as
they urinated on stockholders. Oh how I miss the days of such
clear-cut stock ratings like as “strong under perform” and
“accumulate loosely.” The analysts were also hampered by difficulty
getting enough severed chicken feet and unborn calf’s blood
to conduct a proper “stock valuation ceremonies.”
Even the grossly overfunded
Securities and Exchange Commission blew the call. Tough to
blame the cops on this one, though. The SEC has a serious
identity crisis. The same people who condemned it as part
of the Evil, Anti-business Red Tape Bureaucracy before the
last election are now bitching because it failed to regulate
business. Exsqueeze me?
Finally The President
motorcaded up to Wall Street to announce he’s strongly against
illegalness. Gee Dubbya wants to sentence “egregious” white-collar
criminals to a lifetime of playing public golf courses and,
in a stunning anti-regulation reversal, hire more regulators.
(This HAD to be Clinton's fault.)
I’m sure -- given America’s
traditional tough stance on white collar crime -- the criminal
indictments for everyone involved in the latest white-collar
shareholder gang rape are coming any second now. Really. And,
if convicted, perpetrators will face a fierce tongue-lashing,
sustained scowling, some intense probation and the loss of
all Evian water privileges for six months. They may even (gasp)
have to do their own grocery shopping. NOOOOOOOO.
Meanwhile, back in the
'hood, anyone who sticks the muzzle of a 9mm into the snout
of a 7-Eleven clerk and steals $59 and a Big Gulp will spend
the next 8 years sharing a cell with a large hairy man named
Bubbles.
I suspect at some point
the Global Crossing and Enron and WorldCom and similar perpetrators
will have “suffered enough.” The court will take away the
rich guy's second-through-fifth cars, force him to sell one
of four houses and make him pay back $50 million (a full 10%
of his net worth!) and declare he’s “suffered enough.”
Seems fair.
But before we all get
into a grand mal, self-righteous froth, let’s remember we
all smugly cashed the checks for stock profits when times
were fat. Presented with quarterly profits of 15%, we demanded
20% and figured it would last forever.
Back when I worked for
a tech company in the late 1990s, we lusted to be hired by
a dot com BEFORE it went public. Nextbigthing.com would give
you 50,000 stock options instead of a salary. When the company
later went public, people would buy it almost reflexively
-- because it was a Tech Stock, dammit! -- doubling the share
price overnight and, badabing, making you an instant millionaire.
It happened just like
that for the fortunate few. For rest of us it was a pipe dream.
Pardon my free enterprise blasphemy, but with the publicly
traded world in a hammerhead stall, I think the stock market
is overrated. At minimum I’m sick of trying to figure it out
on my own and less willing than ever to drink any stock analysts'
Kool-Aide.
Today I put my 401(k)
cash in an S&P 500 index fund, which matches the performance
of the diverse S&P 500. Plus I plow money into a low-fee bond
mutual fund and buy government I
Bonds. Yeah, yeah, I’m “missing out on investment opportunities.”
I Bonds make about 4.5% these days. Don’t call or e-mail me
with your “fabulous investment opportunities.” I’ll hang up
on you or delete your e-mail.
I don’t have the energy
to get the Ph.D. required to determine what stocks are good
buys on my own and I’m tired of feeling guilty about it. And
I’ve seen nothing to indicate the so-called stock professionals
don’t just flip a coin or throw darts at a board to make their
recommendations.
Besides, being CEO of
Bill Zahren, Inc. takes all my attention. I’m responsible
to my major shareholders -- a wife, two daughters, a puppy
and guinea pig. For now the stock market will have to, as
my hog farmer cousin Gib used to say, “suck hind teat” on
my bank account.
(Note to non-farm people:
The hind teat gives the least milk.) It’s nothing personal,
corporate America. Strictly business. You understand.
© 2002 Bill Zahren
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