Growth

Growth for the sake of growth is the ideology of the cancer cell.

Edward Abbey

Perhaps it is my natural temperament to do things deliberately and with purpose (after all, it is the tortoise who wins the race). Maybe it is my persistent skepticism. Quite possibly it is an outgrowth of my intuitive personality type (INTJ). Whatever the reason, I have always been resistant to Wall Street’s incessant demand for growth from public companies.

I have an MBA. I know that investors demand growth because growth drives the stock price up. And investors want the stock price to go up. Q.E.D. But at what price? And over what time horizon?

Yesterday’s announcement of the Pfizer / Wyeth merger reminded me of the long odds such marriages have at success. Depending on who you read, anywhere from 50 – 80 % of mergers fail – destroying vast amounts of shareholder value in the process. Why pursue such a risky strategy?

I am in the process of launching a web-based career management site and if my nascent little company ever reaches the size that we have shareholders, we will continue to drive growth organically and sustainably. We will pay dividends to share the wealth. We will stop growing when doing so means preserving the long term viability of our enterprise.

I have my suspicions as to why “growth at all costs” is so prevalent. Wall street and the board rooms of corporate America seemed to be fueled by transaction fees and bonuses. Filtering the behavior of corporate executives through these simple lenses reveals that short-term vision can be blinded to long-term implications. In any case, they would do well to behave less like a cancer cell and more like a redwood tree.

Similar Posts

  • The South is a Place

    The South is a place. East, west, and north are nothing but directions.

    — Letter to the editor, Richmond Times Dispatch, 1995

    I am reading the delightful book Confederates in the Attic. The quote above opens the second chapter.

    When I lived in Colorado I took every opportunity to explore the magnificent hiking trails and striking mountain vistas offered by the Rocky Mountains. When I lived in Albuquerque I breathed deep to absorb the Native American spirit still alive in The Land of Enchantment. And when I lived in Princeton, NJ, I savored Washington’s Crossing and then immersed myself in the local history surrounding the Revolutionary War.

  • Important Moments in Life

    Sooner or later we all discover that the important moments in life are not the advertised ones, not the birthdays, the graduations, the weddings, not the great goals achieved. The real milestones are less prepossessing. They come to the door of memory unannounced, stray dogs that amble in, sniff around a bit and simply never leave. Our lives are measured by these.

    — Susan B. Anthony

    I have never been very big on holidays like birthdays, anniversaries or Christmas. They seem like such artificial constructs to me. Years ago I reached a peaceful truce with my family and friends to not exchange gifts at such times. We have all been enjoying stress-free holidays ever since.

    I don’t mean to demean the important moments in life.

  • Gorilla Marketing

    I am an avid fan of podcasts. I listen to many hours a week of interesting and compelling content completely on my own schedule. The TWiT Network produces some of the best, including This Week in Tech, MacBreak Weekly and Roz Rows the Pacific. Leo Laporte is a master behind the microphone.

    Leo continues to chase profitability by adding an ever-increasing array of sponsors for his “netcasting” ventures. Drobo and GoToMeeting are recent additions and he is pushing the boundaries of tolerance with the seemingly endless droning on about Visa’s security protection for online fraud. …

  • Occupy Wall Street’s Beef: Wall Street is Cheating

    These people aren’t protesting money. They’re not protesting banking. They’re protesting corruption on Wall Street.

    Matt Taibbi finally articulated what I have been trying to find words for. I don’t begrudge Wall Street, or anyone, their good fortune (I seek the same good fortune). I just begrudge the way a few people have rigged the system in their favor.

  • Be the Best of Whatever You Are

    If you can’t be a pine at the top of the hill,
         Be a shrub in the valley – but be
    The best little shrub by the side of the hill;
         Be a bush if you can’t be a tree.

    If you can’t be a bush, be a bit of grass,
         And some highway happier make;
    If you can’t be a muskie then just be a bass,
         But the liveliest bass in the lake!

    We can’t all be captains, some have to be crew,
         There’s something for all of us here;
    There’s work to be done, and we all have to do
         Our part in the way that’s sincere.

    If you can’t be a highway, then just be a trail,
         If you can’t be the sun, be a star;
    It isn’t by size that you win or you fail,
         Be the best of whatever you are.

    — Douglas Mallock

  • Simple Financial Recovery Plan

    My new favorite podcast is Planet Money. As the economic turmoil has progressed from frightening to surreal, the NPR crew at Planet Money have done a wonderful job explaining the intricacies of the complex financial world in terms that are easy to understand.

    Here is what I have been able to figure out so far. Forget about the subprime mortgage crisis. A huge part of the problem is these credit default swaps – to the tune of $55 trillion dollars. These “insurance policies” were not only taken out by people who lent money to protect themselves against potential loss. Financial gamblers were also taking out credit default swaps on other people’s loans! This is raw gambling. Some analysts estimate that for every CDF taken out to by a lender to protect a loan, ten other CDFs were sold by and for third parties on the same loan.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.