Friday, June 28, 1996
What About Bob?
by MF Edible

One can learn a lot from an outhouse. It's damp, dark and obsolete, but sometimes history books are written on soiled pages. It's easy to marvel at the wonder of the urinal cake and modern day plumbing, but the drain remains the same.

All of which brings us to the stock market, where they know how to make green out of Tidy Bowl Blue but they are never sure why. The sad truth is that the equity bidet is an illogical place where hygiene is more of a greeting before a power lunch than an ethical mandate.

Illogical? Yes, how can someone label a think-tank rational when it rewards a company for expanding or scaling back but never for just getting by. Check me on this, but it seems that stocks get a boost when they announce that they are either building new production facilities or when they have to restructure and close down those very same factories.

There is a solution to the dilemma and I call him Bob (trademark pending). When a company which has consistent profitability and a kiss-friendly balance sheet finds its stock chained in the cellar, buying back shares is not the answer. Hire Bob! Yes, sign Bob up and work up a press release stating that conditions appear favorable. To keep up with the massive anticipated growth, announce that Bob has been brought on board. Then just sit back and drool as analysts upgrade the company from "hold" to "buy" based on the rosy outlook. After all, if it's Bob, it has to be a boom.

Of course, this may only be good for a 5%-10% rise in the stock. So, after the last piece of confetti is swept away, once all the analysts and momentum investors have moved elsewhere, fire Bob! That's right, announce that after careful review of operations, and given the uncertainty of the future, the company has gone through a painstaking process to trim costs and found that Bob is expendable. Wipe the drool off your chin now and really foam at the mouth as those very analysts find it fit to upgrade the stock from "buy" to "strong buy" based on the restructuring plan.

Now Bob is a real person with a family to feed and human emotions, but why let that get in the way of appreciating stock-option compensation and bonuses? Besides, it will spawn a new generation of classified advertising. Want ads will begin to spring up with "Bob Wanted" and "Bob for Hire" as companies gimmick their way to stratospheric stock valuations. Temp agencies will be flooded with calls, "Hi, there is nothing wrong with my company, so please send me a Bob right away. Please, this is urgent, I need a Bob pronto!" Accustaff will become "Bobs 'R Us" and who could blame them?

So the logic-poor stock market creates another useless professional category. Copper plumbing and silent flushes and the outhouse is still alive and reeking. Pity Bob or respect him; it's a shame the market applauds the accordion player.

Transmitted: 6/28/96