Let me start with a example once again. Chrysler the leading car manufacturing company kept its part of profit as retained earning, not investing it. The retained earning column soared in the balance sheet in few years, now there is this Business Analyst who raised the hell saying the funds should be reinvested in the company’s operations or returned to shareholder. Management disagreed, arguing the funds were needed to weather possible future economic downturns. Since business analyst are supposed to be the blue eyed boys of the market, shareholder joined them as a result the buildup of marketable securities were reduced and reinvested, its stock rose and shareholder made money.

Today Chrysler is looking at US Govt for a bail out.

With software and financial firms going down I fail to understand why BA in a software firm did not warned against dependency on a single client or sector which is a general management rule. Or say why BA could not predict the sudden collapse of large banks in US even when there Balance sheet reflected good liquidity ratio’s .

I remember my teacher Mr.Mayank Upadhyay making us understand to look into basics of company’s operation ( where the money is coming from)

Companies invest in million on their advice, should they fail they loose their job sinking hundreds of other employees with them. No wonder that mid and small size companies are better placed because their MD use their own grey cell and invested their hard earned money wisely.

Question is why I am saying all this, it is because I refuse to be at the receiving end just because some so called financial wizkid has come up with some dumb plan promising 30-60 % return (ROI in their language) in return for their hefty pay packets and bi annual increment, not forgetting flashy cars, house as fringe benefit.

To close this Blog- BA have advised oil and oil field equipment companies not to slow down their projects as by 2010 the economy will rise and demand for oil and related products will rise once again. Till then they should just bleed ( Who is going to finance them till then- That’s not their concern)