But 20 to 30 analysts follow this and some of them visit stores weekly interviewing employees. For an employee to be led to beleive he/she will be ahead of the curve when the turn involves credit [What manner of evil hides in covenants], fashion and, from Mark's comments, logistics as well, is a mistake.
Some analysts do this, but where were most of them when the company first ran into problems and they all had strong buys on the stock? I'll admit that I don't read every analyst, but I still have read nothing from any of them on the systems problems Gap has had. They were a little better on covering the fashion goofs, but they were still well behind the curve when it came to downgrading the stock, and they didn't tell me anything I couldn't find out for myself by going into the stores and looking at the traffic and the markdowns.
I agree that the financing issues can get much more complicated, although once again I'm not seeing much of use coming from the analysts other than a generalized fretting over the debt level. But even here employees, even part time ones, are not completely clueless. When a company begins to experience cash problems there are usually plenty of signs at the employee level. Seemingly irrational cutbacks in expenditure, deferral of maintenance, cancellation of projects, the signs are always there.
You are right that someone asking those types of questions should be seeking help for some of the issues, especially the overall portfolio ones. But I also think she can take a lot more responsibility for the areas in which she has some advantages over the rest of the world. |
