Still Dreamland - A Long Comment

There's an old saying in California, that says Hollywood is the place where dreams are made.

Well Hollywood just got replaced by Silicon Valley. According to a story in theregister.co.uk, last week Hewlett Packard held  a party for stock market analysts. And like any party where the booze flows freely, the large computer hardware company was overflowing in optimistic predictions about it's future.

Basically HP said it was going to get a bigger share of the IT market and do "better" than it's competitors. What it meant by "better" was, according to theregister.co.uk, not immediately clear. < That must have been some party. > Eventually however, Hewlett did finally admit, that it expected it's revenues to grow 5-6% during the years 2009-2012. The story was unclear precisely whether that meant 5% per year or 5% growth for those entire three years. Upon further brief research by yours truly, Guido, it looks like only 5-6% growth for the entire period of 2009-2012.

That's only  for HP, which is suppose to do better than the rest of the IT industry. By implication, this means the rest of the tech sector is suppose to do worse in revenue growth.

However, the good news for the rest of the tech sector is that no one, including Hewlett Packard, has any idea what's going to happen even two months from now, let alone over the next three years. So sales for the rest of the tech industry could be way better than HP is currently predicting. Or they could be disastrously worse.

Let me put this kindly. The chances of them being much better than HP predicts are minimal.

If these facts sound confusing, it's probably meant to be that way. That's because it appears HP's analyst party was long on the liqueur and short on the facts.  As pointed out on this web site < See the articles Lets Pretend and Grand Expectations >, what actual historical financial information that does exist for American companies, is usually terrible. < I can't recall any good factual news, but there must something positive. At least something? >

So basically what is happening is this. If there's nothing good to tell people, they'll invent a new form of informative news called "the future is now". Without carefully reading the press releases coming from these frims, it is easy to misconstrue that all that is being said, is that corporations and Wall Street expect everything to get better. When asked for elaboration, things really start getting amorphous. Many financial reporters, not being experts in economics or accounting, merely go away pretending they understand. Besides, they REALLY want, like everyone else, to believe things will get better. Rather than see  their pension fund evaporate into nothing.

Well they had strong beliefs in the Middle Ages also. And they kept believing while the plague in the 1300s wiped out 3/4 of Europe. Eventually, that caused many of the living to stop believing like they did previously, and for better or worse, modern times began.

Hewlett Packard is not alone in silly analyst meetings; though Guido has to admit they've gotten sillier over the last year.

Before the the October 2008 crash, Student Loan Marketing < Sallie Mae > had a telephone Fund conference given by its' new chairman Alfred Lord.

Guido heard this conference in its' five minute entirety. If, as Carmine Gallo claims, Steve Jobs is the star of corporate PR presentations,  all Guido can say is that Al Lord can't even do a poor rendition of a clown.

To say the man's presentation was atrocious, would be excessive flattery. He knew absolutely nothing about what was happening with the company, mumbled a bunch of incoherent worlds in his opening remarks, and replied to even simple questions < like what are the firm's outstanding liabilities > with the answer "you'll have to talk to Stan about that". I never did find out Stan's last name.

Al's closing statement was that everyone better show up early at the "investors meeting", because "we're going to have security dogs there" or some such stupid comment. I, for one, had no idea what investor meeting he was talking about.

After that fiasco, the American financial press pretty much did the best it could to report Al's "presentation" in a complimentary way. Within a couple months, Congress bailed Sallie Mae out of it's difficulties with something like $100 million in funding < I can't recall the exact amount. >

Keep in mind, this was before the October 2008 financial collapse.

So now you know why Al Lord was chairman of Sallie Mae. He has friends in the right places. It certainly has nothing to do with his IQ.

Sadly, this is the case for most of America's leadership, both in private biz and public gov at all levels. It has become a nation run by ignoramuses.

"This is an exciting time for our company." - Alfred Lord

< As  indicated, many of this website's articles are still as relevant as they were over the past month. Even our first article Grand Expectations. If you enjoy this site, and haven't read all it's stories, we'd suggest you do if you have time. They can still be of use in your quest for information, and we'd like to hope, sometimes entertaining. - Until tomorrow, ciao my friends. - Guido, >