Dixon: The Stock Market As Greek Tragedy

Making an interesting comparison between the characters on HBO’s The Wire, and those caught in the confines of the modern day stock market expectations machine, Chris Dixon paints a somewhat tragic picture of what it’s like to run a big, publicly traded growth company these days…

From cdixon.org:

This blog is mostly about startups so let me tell a true Wire-like startup story. There is a large, publicly-traded company we’ll call BigCo. BigCo has a new CEO who is under heavy scrutiny and expected to get the stock price up over the next few fiscal quarters…

All this means the CEO is fixated on growing BigCo’s revenues while keeping operating expenses down. A great way to do this is through acquisitons, which analysts consider one-time expenses (CapEx)…

Once the deal is closed they immediately start planning how to cut operating expenses from the newly acquired company. They decide the best way is to move the engineering offshore. This rips the heart out of the engineering-driven culture and as a result morale drops, product quality falls, and key people quit…

The dialogue here is a classic example of what corporate execs feel like they must do to keep and justify their jobs, even though a misguided move like an expensive acquisition is often the result.  Dixon’s point is that just like on the last decade’s best TV show, in the stock market most of us do not overcome the strictures of the institution in which we toil.  The machine almost always wins…that’s just how it evolved.

Get over there and read the rest, it’s an extremely sharp post…

Institutional Failure (cdixon.org)

Tags: , , , ,

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. replica watches commented on Sep 18

    … [Trackback]

    […] Here you will find 49179 more Information to that Topic: thereformedbroker.com/2010/01/30/dixon-the-stock-market-as-greek-tragedy/ […]

  2. gay sex doll price perfect.com commented on Dec 31

    … [Trackback]

    […] Info to that Topic: thereformedbroker.com/2010/01/30/dixon-the-stock-market-as-greek-tragedy/ […]

  3. their explanation commented on Jan 28

    … [Trackback]

    […] Here you will find 32688 more Info on that Topic: thereformedbroker.com/2010/01/30/dixon-the-stock-market-as-greek-tragedy/ […]