Art Jacoby's Monthly Newsletters
Newsletter Library - September 2006
The Invisible Stock Market
Publicly traded companies conduct business under the intense glare of industry analysts as well as institutional and private investors. The executives of these companies have a clear responsibility: increase the stock price through earnings growth.
Privately held companies, on the other hand, operate away from the unforgiving spotlight of the public markets. This can be advantageous, because it allows management the opportunity to concentrate on long term gains rather than pursuing the quarterly gains required by public markets.
However, there are unfortunate consequences that can come from doing business outside the realm of the public markets. The lack of intense attention paid to a privately held company can lead to a lack of discipline, and it can diminish efforts to drive earnings growth. Important decisions and actions are often delayed, and unacceptable performance is more likely to be tolerated.
What’s the antidote to this potentially damaging atmosphere? Vigilant attention. Act as if your business is trading on an invisible stock market. Think strategically. Respond quickly. Don’t allow problems to fester and unacceptable performance to continue. Act now – or the (invisible) market will punish you!
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