All over the world, the stock markets go up and down every day. Every day millions of investors make decisions based on the last quarter numbers of companies. The company stock is rewarded for posting great numbers for a quarter and punished for a single misstep during the quarter. In such a scenario, the company executives more often than not are always in reactionary mode. The "You are as Good as the last Quarter" attitude has permeated down the management chain right from the CEO to the middle management. Somewhere down the line, the companies have moved away from their core value. What has gotten lost on people is the fact that a good company remains that regardless of a bad quarter. It is like treating a crumbled dollar note as waste, due to a belief that it has lost its worth.
The problem is not just limited to the higher echelon of the company. The culture of making a quick buck trickles down to every facet of an organization. Every department is conditioned to spitting out the numbers every single quarter. Decisions are made to salvage the company numbers during a single quarter. Every quarter the employees in sales are under pressure to perform or perish. Every year Department Heads face a decision to grow profits or cut costs, which in real world terms means laying off people. This is probably a necessity in a recessionary economy for the survival of the company or when someone is given a pink slip because of incompetence. But in the long run, it is a foolhardy move to let go of a competent employee.
As a practice, every one in the workforce needs to look beyond short-term goals and look to build a business which is not taken hostage every time it fails in moderation. Traders on the other hand need to grow up and understand that the most money is made in long term holds and not short term Bearish moves. It is during a crisis that good companies need their investors to back them. People or their brokers need to invest in companies which have a good prospect over a period of time rather than run up the price of a company beyond its worth and sell it all at the same time when bad times fall on it. While this may seem Utopian, it still is the only way to prevent such Carthage on Wall Street.
