Predicting the future of businessBy Ronn Machio
Predicting the future of business has always been a challenging
task. From novices to experts, CEO’s, Investment bankers,
analysts, professors and investors, we have all tried to predict,
where a stock/company/ is headed. I personally do this on a day
to day basis because it is part of my job. While we rely on
experts to do this for us, the analysts, CEOs, Investment
bankers, stockbrokers, friends, family members, and even the
occasional crystal ball there is no guarantee that their
predictions will come true, I have compiled a few colossal
failures and some that were just mere hiccups, from some famous
people. Please enjoy.
1. “The concept is interesting and well- formed, but in order to
earn better than a “C”, the idea must be feasible.” A Yale
university management professor in response to Fred smith’s paper
proposing overnight delivery service. (Smith founded FedEx
corp.)
2. “There is no reason anyone would want a computer in their
home”. Ken Olson, president and founder of Digital Equipment
Corp., 1977
3."I think there is a world market for maybe five computers." --
Thomas Watson, chairman of IBM, 1943
4. “We went to Hewlett-Packard and they said we don’t need you,
you haven’t even graduated from college yet” Apple founder Steve
Jobs on trying to get Hewlett interested in his and Steve
Wozniak’s personal computer.
5."Stocks have reached what looks like a permanently high
plateau." -- Irving Fisher, Professor of Economics, Yale
University, 1929.
6. “These Google guys, they want to be billionaires and rock stars
and go to conferences and all that. I don’t think they will be
around running the company in two to three years”. Bill Gates in
2003
7. In February 2005, Microsoft unveils a new version of MSN
search, developed at a cost of $100 million, in an attempt to
take market share from Google. MSN's share of Internet search
traffic promptly drops by a full percentage point.
8. In 2005, H&R Block announces a review of its recent financial
statements, estimating it will find discrepancies in its favor of
about $19 million. Two months later it reveals that the review
found $77 million in errors--in the other direction. The company
explains that it had "insufficient resources" to identify and
report complex transactions in its corporate tax accounting.
9. After complaints from animal-rights activists, Kraft Foods
deletes an online animation for its Trolli Road Kill Gummi Candy
that features animals amusingly caught in car headlights. The
fruit-flavored Trolli candy, which comes in the shapes of
squished snakes, squirrels, and chickens, is later discontinued.
10."The effect of Disney and Pixar guessing wrong on this was
actually not giant."-- Pixar CEO Steve Jobs, defending overly
optimistic DVD sales forecasts. The animated-film studio sees
second-quarter earnings drop 66 percent.
11. Ex-Tyco CEO Dennis Kozlowski receives 8-25 years in prison for
mis-using company funds. A few of the things he did with company
dollar, spent 2 million on his ex-wife’s birthday party on an
Italian island and a $6000 shower curtain.
12. “Everyday for six years we’ve been shucking and jiving for the
amusement of a bunch of retards and you say we’re not suffering
enough?” Suck.com last post on its website after receiving
millions of dollars in funding from investors and Venture funds
and then going belly up.
13. In a press release, Gradient writes that this case "is about
the rights of investors to obtain information enabling them to
make better investment decisions. Gradient will not be
intimidated by those who don't like our opinions and who want to
strangle any and all negative comments with contentious
litigation..." this is after overstock.com sues Gradient an
independent research firm that it conspired to drive down its
stock. Over the course of 2005, Overstock.com CEO Patrick Byrne
issued pronouncements about short-sellers who were driving the
company's stock into the ground. After listening to an Overstock
conference call with investors in August, Dallas Mavericks owner
Mark Cuban posted to his blog a list of the topics Byrne covered:
"Miscreants; an unnamed Sith Lord he hoped the feds would bury
under a prison; gay bath houses; whether he was gay, does
cocaine, both, or neither; phone taps; phone lines misdirected to
Mexico; arrested reporters; payoffs; conspiracies; crooks;
egomaniacs; fools; paranoia; which newspapers are shills and for
who; money laundering; his Irish temper; false identities;
threats; intimidation; and private investigators. All in 61
minutes." Cuban then short-sells 10,000 shares of Overstock.
14. Polaroid is sold to the Peters group after 3 years in
bankruptcy. Chairman Jacques Nasser walks away with $12.8
million, CEO J. Michael Pocock gets $ 8.5 million meanwhile
retirees lose their medical and life insurance benefits and only
receive one time checks of $ 47.
While these are but a few of the really funny mistakes made by
our “experts”, you can imagine if you were an investor or worked
in the companies at the time when these events occurred, the
results would have been really disastrous for you because we all
know that those who suffer when company’s management make the
wrong assumptions about their future and the industries they
compete in, is the Investors, employees and retirees.
So I urge you, if you are letting that (“expert”) broker,
Investment banker, Uncle Fred, make a gamble about the future of
your investments/nest egg/ career/job, do your due diligence and
make sure you have all the information available to you before
you make that decision, it is after all your future isn’t it.
Ronn Machio
