Meeting management a waste of time?

This is precisely the article's title by Ms TEH HOOI LING of Business Times dated 11 Nov 2006.

For the uninitiated, she referring to equity analysts or fund managers meeting with management of companies they are covering. Ms Teh reviewed Dresdner Kleinwort Wasserstein analyst James Montier's 100-page report on the seven sins of fund management last year.

The third sin is - Why waste time listening to company management?

Mr Montier cited it is a waste of time due to some inherent flaws in human.

• We tend to follow the instruction of the authority. He quoted an interesting study where more than 90% of students in various countries will do something to hurt themselves when told to do so by their teachers. This is despite the fact that action will hurt them. Translating that to investment environment, the more "god-like" the business personality or management is, the easier it is to influence the weak or inexperience minds of these analysts.

• Can you tell the difference when someone try to pull a fast one on you? Again the studies showed the general population would have about 50-50 chance of calling it right.
  

Meanwhile, Mr Montier's other six sins of fund management are:

• Our insistence on relying on forecasts when it has been proved time and again that we simply cannot forecast. Ed says - While I may agree to forecasts up to 2 years, anything longer would have a good chance of being rated "Fiction".
  

• The illusion that more information is better information. Ed says - My students may measure how good a lecturer is by the thickness of notes given to them.
  

• Thinking that you can outsmart everyone. Ed says - Who can blame us for that? We must be optimistic right?
  

• Being short-term focused. Ed says - Boh pian when short term is 6 months and long term is 1 year in this era where all things are disposable (including relationship).
  

• Believing everything you read. Ed says - This is definitely a no-no to me.
  

• Believing that group decision-making is better. Ed says - Someone ever use this as "common sense management" ie. when you are not sure, ask a few people and you will know what to do.
  

The list now confirms my gut feel that the stock analysts are no better than me.

Ha ha!!! Just kidding.