Take a ringside seat as the beaten strike back
Bear market media coverage tends to move in cycles of its own making. You cannot simply go on suggesting that things are really bad for several years in a row without developing some form of sub-plot with which to keep the attention of readers or viewers. First up, there are the 'this is real bad' stories; then along come the 'hmm... this could actually be a time to invest' suggestions; and in-between times there's a good bit of old-fashioned mudslinging.
It's the mudslinging that everyone is really interested in, of course. We all know that times are bad when the market is on the slide; the constant reminders in the papers only serve to deepen our gloom. We all know that this could be a good time to invest, too, but it's kind of hard to let theory rule our hearts when we know there may well be a war round the corner. To say nothing of poor corporate earnings left, right and center.
So we all wake up and really take note when someone tries to lay the blame for our woe at someone else's door. We've seen a mixed bag of blame over the last couple of years, ranging from overpaid analysts hyping stocks to Enron-style corporate greed. One of the best to date, however, has to be Simon Davies of Threadneedle Investments, who appears to blame retail investors. Now, we could debate the merits of whether that's a sensible thing to do when you run the fourth largest retail fund management business in the UK and you're just entering the busiest part of the fund-raising calendar, but that's by the by.
'People make stupid decisions. They went haring into technology stocks three years ago and now they want to leave them and go and buy a larger house at the top of the property market,' Davies was quoted as saying in the Financial Times.
To be fair to Davies, he did qualify his quote by suggesting that fund managers 'pour petrol not water, on the fire lit by basic human greed,' so it quite clearly isn't just the fault of us mere investing mortals. Davies is big enough to take his share of the blame.
Rightly so, according to Sir Richard Sykes, former chairman of GlaxoSmithKline. Sir Richard thinks that both small and large investors should take the rap for diametrically opposed reasons.
Small investors, it seems, have got a bit too big for their boots and should be banned from causing chaos at annual meetings. Large investors, on the other hand, are 'pathetic' and need to be pushed in the direction of taking a firmer grip on their investments. Corporate bosses like Sir Richard mysteriously escape his own wrath. Such comments would not be so noteworthy had not Sir Richard been recently appointed external advisor to the UK government on investment and wealth creation.
Many investor relations officers are well used to the harsh realities of such a blame culture within their own organizations. Chief executives display an amazing ability to take the credit for a rising share price but fail to see a personal link when the stock starts moving in the opposite direction. That's usually the time when accusing fingers start pointing towards the investor relations department and everyone from the board through to employee shareholders wants to know what you are doing about it.
Our advice would be to take a leaf out of Simon Davies' book and blame it on your customers. Another option is to follow the lead of Sir Richard and slyly redirect those accusing fingers toward the pathetically apathetic investors. Of course, it would also help to remember the golden rule of bear markets: share price performance has nothing to do with you.