July 19, 2002

The lack of trust in

The lack of trust in corporate managers have damaged stock values more than terrorist attacks on New York and Washington. The Dow is at is lowest point since 1998. What this shows is character and values do matter. They are the building blocks for a dynamic economy. Managers must have the decency not to cook the books for their own benefit, and investors need to know that managers are telling the truth. Simple honesty allows people who have never met (and will never meet) transfer money to one another. Investors need to be reassured that companies won't decieve them. That's happening through internal corporate decisions, and it will happen when some people go to jail. But this will take time. My instinct is we're nearing a bottom to this. People are starting to be too pessimistic. Now is a good time to look at companies that fallen with everyone else, have solid, ethical managers, and good growth potentials.

I own Cisco and have lost a bunch. I'm still holding it because since I've lost so much already I might as well hold on. They're also the type of company who have had no clouds of scandal and will continue to grow. A negative for the networking giant is an important executive recently left, so that could be a sign that people within the company are squeamish about the future.

"Dow Dives 390 Points"

"Cisco Exec Leaves Amid Tough Times"