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At the last I4C meeting, I found myself caught in the wave of optimism brought on by the presentations. As Carl mentioned in the end, this is not a good thing.
If one is unfamiliar with the company being presented, one will just accept the facts as they come. Thus, if a presentation is to begin analysing the upside, it will be more likely to be accepted without criticism. The audience would then be "preconditioned" to be optimistic and therefore give less weight to the downside analysis at the end. This will lead to an optimistic outlook on the stock.
Instead, if presentations are started by analysing the potential downside, the audience have less/no background information on the company to dispute it. It will be more willingly accepted. They will also be armed better to critically analyse the upside of the stock, thereby giving a more accurate outlook on the stock.
"Look at the downside of any transaction first; if acceptable, then examine the upside."- Rene Rivkin
If one is unfamiliar with the company being presented, one will just accept the facts as they come. Thus, if a presentation is to begin analysing the upside, it will be more likely to be accepted without criticism. The audience would then be "preconditioned" to be optimistic and therefore give less weight to the downside analysis at the end. This will lead to an optimistic outlook on the stock.
Instead, if presentations are started by analysing the potential downside, the audience have less/no background information on the company to dispute it. It will be more willingly accepted. They will also be armed better to critically analyse the upside of the stock, thereby giving a more accurate outlook on the stock.
"Look at the downside of any transaction first; if acceptable, then examine the upside."- Rene Rivkin
