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  • August 20, 2018
  • Chuck Osborne

“It’s Not My Fault”

There are no more plastic straws in our house. Have you joined the bandwagon? For those of you who have not heard, there has been a very rapid and very public backlash against the plastic straw. It started when a picture of a turtle with a straw stuck in its nose went viral on social media.

When I first heard to the story, I had not seen the photo because I am neither social nor do I care for media, but I felt very sorry for the turtle. I understand why such a picture would tug at the heartstrings. Then I quickly realized how telling this story is of our current society: We’ve blamed the straw.

Please do not misunderstand, I have no problem with my wife banning plastic straws in our house. If it were up to me all straws would be banned and our children would drink out of a cup like a big boy and girl. I’m not fond of the straw, but that is just me. I also have no problem with efforts to cut down on waste. I grew up at a time when Coke bottles were made of glass and you actually returned them to the store to be reused. Waste not.

However, I can’t help but thinking that if that same turtle had been photographed when I was young the message would have been, “Stop littering.” The turtle did not wander into a fast food restaurant and grab a straw and shove it up its nose. The straw didn’t leave its package in search of a turtle to wound. No, some human threw that straw into a body of water. It isn’t the straw’s fault; it is the litterbug’s fault, whoever he or she is. Yet, we have blamed the plastic straw. If the litterbug had simply thrown a paper straw into the river, then it would have biodegraded. (Well maybe, depending on how many paper straws are in the river.)

This morning the Trump administration asked the SEC to study the impact of moving away from companies reporting earnings quarterly and toward reporting semi-annually. Corporate leaders have told the administration that this would boost growth. Similar to the straw story, I personally would have no issues with this. Many of the foreign companies we have invested in report semi-annually. We are investors, not traders, so one quarter’s results do not matter that greatly to us. However, this too is revealing of our society. “It’s not my fault that I run this company in a short-sighted way, it is the quarterly report’s fault.”

Except, the best companies and the best corporate leaders do not do this. Amazon founder and Chairman Jeff Bezos immediately comes to mind. He has famously ignored the supposed “need” to show good results every quarter, and has instead constantly invested in his business for the long haul. As a result he runs one of the most powerful companies in the world. It hasn’t hurt the stock either, much to my regret, because it has always seemed too expensive to us. Oh well, that isn’t Jeff’s fault.

The best companies have always been the ones that focus on the long-term business. They want relationships with their customers and clients, not just transactions, and therefore they treat them the right way. They value their employees and the communities in which they work. This is nothing new; it has always been that way. The companies who blindly focus on this quarter’s earnings report are the ones that fade into oblivion.

So, like the backlash on plastic straws, I think the Trump administration’s earnings reporting suggestion is somewhat silly. It isn’t necessarily harmful, and it may even lead to some better management. However, we don’t need to get rid of straws as much as we do need to stop litter bugs, and we don’t need to stop quarterly reports as much as we do need to stop short-sighted management. We need to admit, as Jimmy Buffett finally concluded, it is my own [d***] fault!

Warm regards,

Chuck Osborne, CFA