AN ATTITUDE ADJUSTMENT

Bill Tatro


Having lived most of my life in upstate New
York in the snow belt region, (between
Syracuse and Buffalo) I always found it
prudent to heed the advice of the weather man
when he proclaimed a major storm was
coming. Most people would make a mad dash
to the store to load up on such essentials as
bread and milk. That always confused me since
there is just so much milk you can drink and
bread that you can eat. I, on the other hand,
would make sure there was enough gasoline
to drive the generator in case the power went
out. Then I went for the milk (wine) and the
bread(steak), to each his own.
There were many times that the weatherman
was not necessarily wrong about a storm but
was wrong about the severity. A little egg on
his/her face. However, there were very few,
egg or not, that weren’t appreciative of the
warnings since, inconvenient or not they were
life threatening forecasts. We never took a
winter storm for granted.
People today, when viewing the current stock
market, would be well advised to listen to the
warnings about the coming storm. Like the
weatherman, who uses various measurements,
historical basis, and even life time experience,
so to do different “financial weathermen” in
forecasting the financial storm coming.
Excessive leverage, share buyback, nonexistent
cap ex, historic merger and acquisition pricing
would be the equivalent of temperature
inversions, moisture build up and wind flow
changes. The later would send us scurrying for
that proverbial milk and bread. However, the
former simply makes most folks yawn and ask
with a complacent smile, REALLY? AND?
Since weather has been so front and center in
justifying the poor economic results of the past
it may be wise to take a lesson from that same
weather, especially the kind that is
experienced in upstate New York.
The components for a major financial storm
continue to build every single day. We can
ignore them at our peril or we can realize that
it is not a question of if but of when.
Milk and bread anyone?