Smarter Than the Average Bear? I Don’t Think So.

Aug 6th, 2007 | Filed under: Industry

Naming your company after one of the worst things that can happen in your industry doesn’t seem like the best way to position your brand. ("Bull" is when the market goes up and "Bear" is when it heads south.) It would be like starting a new airline and calling it "Crash Blue" or a candy company naming its new product "Diabetes Pieces."

So it is just a tad ironic when one of the top investment firms on Wall Street, Bear Stearns, personifies its name, nearly imploding after mismanaging billions of dollars in mortgage-backed securities and almost destroying an 80+ year old company overnight. The fallout from this poor investment strategy is so bad that it cost the President his job and the CEO was forced to host a conference call on Friday to calm fears that the firm was about to go under.

My favorite line from the transcript of the call (thanks to Marc Andreesen) which will give investors like us continued high confidence in these firms:

Every financial institution, Bear Stearns included, is facing an
extremely challenging market environment. I’ve been involved in the
securities industry for more than four decades and I have seen a broad
spectrum of market dislocations. In the stock market crash in the late
’80s, fixed income troubles in the mid ’90s, and the bursting of the
Internet bubble in 2001, this is not the first time and certainly will
not be the last time that Wall Street and the financial community will
work through difficult conditions.

Imagine what these guys will do with your money. I can’t wait for the next, inevitable crisis!

And I thought they were experts.