<\/p>\n
Hello everyone!<\/p>\n
Wow! $150 billion for AIG<\/span>! Unbelievable. That \u2018s a hell of a lot of money. Who could have seen that coming? Well, interestingly enough there is one tell-tale sign that always underlies these sorts of colossal problems; from Enron, to Tyco<\/span>, to Worldcom<\/span>, to AIG<\/span>. That tell-tale sign is: hubris.<\/p>\n Hubris is a behavioral disease that leads to extraordinarily bad judgments being made. Hubris is another way of saying that someone is extremely selfish and self-centered. What that means in the context of managing a business is that decisions are not made for the good of the shareholders, or even of the business. No, instead, decisions are made to feed the bottomless pits of very weak egos. The problem is that the holes in these executives\u2019 lives come from within, but they have each decided to try and fill that hole externally. In the short and medium-term that\u2019s a great thing for shareholders because these folks are usually very, very driven. That means that Jeff Skilling<\/span>, Dennis Kozlowski<\/span>, Bernie Ebbers<\/span> and Hank Greenberg<\/span> all did things to increase the success and, more importantly, grandiosity of their businesses. However, as the disconnection between a hugely successful business and a still deep-seated feeling of personal vacancy grows, the executives of these firms take even bigger chances. That is, they start doing things that are illegal in a desperate need to fill their hole. It\u2019s as if they are ego-addicts and they need ever greater hits to feel good about themselves. [Feets<\/span> don\u2019t fail me now!]<\/p>\n In the case of AIG<\/span>, and today\u2019s situation, Hank Greenberg<\/span> has been gone for 4 years, however he had nearly a half century to create the corporate culture that permeates the structure of AIG<\/span>. Yikes! And how do I know all of this? I am a retired financial professional whose firm was one of the top 5 largest shareholders of both Tyco<\/span> and AIG<\/span>. While my firm was one of the largest shareholders of these two companies, I steered clear of Tyco<\/span> in my mutual fund because Kozlowski<\/span> always made me very uncomfortable. I wish that I could say the same thing about AIG<\/span>, but I blew it for my shareholders there. I am confident that I would no longer make the same mistake, though. Why?<\/p>\n In our business-culture we love for our executives to have swagger. And there is a fine-line between swagger and hubris. But now I know definitively the difference and the signs that reveal the difference. Those executives possessed of hubris are derisive and insulting to those who question them, whereas those with swagger are not. I distinctly remember being a participant in AIG<\/span> conference calls and having Hank Greenberg<\/span> insult, cut down and chastise intelligent, experienced analysts that had asked good questions. This is inexcusable behavior. So as investors we should all be on the lookout for the evidence of hubris: insulting behavior whose intention is to degrade others in an effort to prop up the insultor<\/span>. In AIG<\/span>\u2019s case hubris has cost the United States $150 billion! Buyer beware.<\/p>\n Smiles to you all!<\/p>\n Jason<\/p>\n","protected":false},"excerpt":{"rendered":" Hello everyone! Wow! $150 billion for AIG! Unbelievable. That \u2018s a hell of a lot of money. Who could have seen that coming? Well, interestingly enough there is one tell-tale sign that always underlies these sorts of colossal problems; from Enron, to Tyco, to Worldcom, to AIG. That tell-tale sign is: hubris. Hubris is […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-25","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/25","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=25"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/25\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=25"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=25"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=25"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}