I know the management of their cash "equivalents", and their Pegaso/Globalstar/etc. Strategic "Investments", is handled by different people.
But companies have a Culture, a habitual way of looking at problems and responding to them. That Culture permeates the organization, and informs all decision-making. When the company is young enough that the founders are still in charge, it is often one dominate personality that shapes the Corporate Culture. That Culture is the context within which all decisions get made.
The reason why I'm focusing (obsessing?) on this junk-bond thing, is that I see it as one more data point, in a long line of data points, all defining a company whose Culture takes too many risks. And, from what I've seen, companies rarely change their corporate Culture, for better or worse. If that Culture is dysfunctional, mistakes get endlessly repeated, no matter what the cost to investors. Like Bernie Ebbers having a margin call, getting bailed out by WCOM........and, a while later, having another margin call. It takes a near-death-experience, or a complete turnover in top management, to have any possiblity of changing the Culture.
I'd really like to believe that the GAAP losses at QCOM are coming to an end soon. But I'm coming to the conclusion, that I should just invest in companies with a track record of competent Risk Management, rather than hoping for a change in bad habits. |
