Saturday, July 23, 2005

The Fool - continued

As I have said in the past, the "fool" strategy can be used in a variety of situations, even by very experienced and knowledgeable people, well, at least people who should be experienced and knowledgeable.

Take for example the situation involving Dick Grasso and the NYSE. This week the WSJ reported that the board (or should that be bored) of directors of the NYSE, during the time of Dick Grasso, claimed not to understand his compensation contract and how the value of his pension package would grow with his salary. Click here to get the article (you need a subscription).

Keep in mind that the Board of the NYSE consists of people with this sort of background. While these people may not have specifically been on the board at the time the contracts were signed, you get the idea that the NYSE doesn't put dummies on its board.

Understanding a contract is an essential part of business, isn't it? Were these guys (and gals) a board - or bored - of being directors and just stopped paying attention.

The point of this post isn't to rip on Grasso for getting paid - how does the adage go - "When they give, you take. When they hit, you run" . It is for the numbskull use of excuse of "I didn't understand" by the people who are suppose to understand these things. At least be honest and say I wasn't paying attention.


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