By letting the sweeping opinion of the crowd rule you, or in buying into any idea or course of action pushed by the momentum of the either ecstatic or depressed 'mob mentality,' you are delegating your decision making criteria and authority to a ship of fools. There is much to be said for making your important decisions based upon your own analysis in a quiet environment -- especially if you are brighter than the median intelligence of the crowd members. Don't 'average your intellectual and emotional IQ down.' By the way, if you are reading The Taking Command Blog, the odds are quite high that you are of significantly more than median intelligence. A wonderfully relevant example of a "You can't lose on this deal -- I'm getting in. How 'bout you?" is the recent failure of Facebook's eagerly awaited stock offering (IPO) to sputter in the fiscal gutter.
Here is a fascinating extract from an article regarding the Titanic-like Facebook investment stock price collapse from Business Insider and author/commentator Henry Blodget. Enjoy the read, and then come back here where we'll be serving coffee and desserts in the basement...
It's Becoming Clear That No One Actually Read Facebook's IPO Prospectus Or Mark Zuckerberg's Letter To Shareholders
As Facebook's stock continues to collapse, the volume of whining is increasing.
Four months ago, you will recall, Facebook was viewed as "the next Google." Now, with no major change in the fundamentals, it's viewed as an over-hyped disaster. Meanwhile, there is ever-louder grumbling that 26-year-old Facebook CEO Mark Zuckerberg is in over his head and should be relieved of command.
As I listen to all this whining, I have a simple question:
Didn't anyone even read Facebook's IPO prospectus?
The answer, I can only assume, is "no."
Because if anyone had read the Facebook IPO prospectus, they would have learned, among other things, the following:
- Facebook's growth rate was decelerating rapidly.
- Facebook's user-base was rapidly transitioning to mobile devices, which produce much less revenue.
- Facebook's operating profit margin was already an astounding 50%, which suggested it had nowhere to go but down.
- Facebook's CEO had a nearly unprecedented amount of control over the company.
- Facebook's CEO had set up this astounding level of control intentionally. Mark Zuckerberg knew all about how impatient public-market shareholders are. And he set up the whole company so he would never have to pay attention to their whining.
- In the 9 months following the IPO, insiders would be free to sell more than 2 billion shares of Facebook that they had been holding for years.
- Facebook was going public at an astoundingly high price for a company with these characteristics—about 60-times the following year's projected earnings, in a market in which other hot tech companies like Apple and Google were trading at less than 15-times. [Read more]
Following the crowd is a mixed behavior with its roots in the complex genetics of species survival as well as in the established need (read Abraham Maslow recently?) to be accepted amongst one's peers.
Simply stated, when you follow the mob, you are simply not acting as a leader. You have surrendered your power of independent discernment to a group of strangers, and will have demonstrated, whether your gamble proves wrong or right, that you are neither strong, nor a true commander.
Making your own decisions as a leader is a lonely business. But it is a calling which draws both the best and the worst among us. For the sake of your employees, your constituents, your troops, your team and for Humanity in general, I would prefer it if you were one of the best among us.
Douglas. E. Castle for The Taking Command Blog and for The Daily Burst Of Brilliance Blog
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