Wall Street: Too much sway over the tech sector?

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RE: Wall Street, Too much sway over the tech sector

IMHO, Wall Street has too much sway over publicly held corporations period.

The expectations of long term investors are very different from short term investors, whose primary interest is maximum increase of the stock. After all, they want their QUICK BUCK NOW!!!!

Long term investors know that business goes through cycles; and for every good cycle, there will be the appropriate downturn.

Wall Street caters to stockholders who want to ride the wave UP and then jump off as it crests. They could care less that for every winner there is also a loser.

Wall Street is also fixated on the premise that stocks only go up!!! History has shown that stock prices CAN go down.

To be the CEO of a publicly held corporation, you have to serve so many masters; with conflicting and counterproductive agendas; and Wall Street ANALysts are constantly carping about performance.

Thus, Wall Street ANALyst comments often cause investors to act like a bunch of "scared sheep"; jumping in and out of investments because of fear.

Think about this - who makes any money, regardless of which way the price of a stock travels?

Answer: Wall Street!!!

Who do you think has a vested interest in seeing constant churn in the stock market (as expressed by high trade volumes)??

Answer: Wall Street!!!

Another issue with many companies is highly leveraged deals. The premise there is that increasing revenues and profits will pay down the debt load. But, pray tell, happens when the economy takes a sh*t. You have that crushing debt load, and the "time honored" way to cut costs is to cut people, and generally those at the bottom get it first. Wall Street ANALysts start carping about the company's sagging stock price, putting pressure on the CEO.

Rarely do you hear of a CEO taking a pay cut when things are bad. CEOs and their board of directors have, in many cases, a too cozy relationship; where the board makes sure that the CEO has his Golden Parachute.

Now, if I remember the periodic table of elements correctly, isn't Gold atomic number 79, and Lead atomic number 82. That Gold Parachute could end up being an incompetent CEOs "lead weight".

Posted by: bfilipiak@...   Posted on: 05/09/08 You are currently: a Guest | Members login | Terms of Use

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