I don’t like the term “Control Freak”. I prefer the term “Control Enthusiast”.
Atlas has been the worst performing share in my portfolio over the last year. In fact, Atlas has lost more than 90% of it’s value – plummeting from more than $3 Billion to more like $300 million… which seems like a lot of money to me (especially when some of it was my money!) And, as a control freak, I thought I should definitely do something about it. Obviously, I could just sell my shares. But for some reason I felt like going to the AGM would be more logical.
So I spent yesterday hanging out with the 2014 West Australian of the Year, David Flanagan at the Atlas Annual General Meeting (AGM) in Perth.
What struck me as a little bit weird is that the company is focusing on what it can control. Don’t get me wrong, I’ve often heard that one of the key distinctives between successful and unsuccessful people is that successful people focus on what they can control. So I should be happy that Atlas is focusing on what it can control, right?
But during his presentation telling us about how they are focusing on what they can control, the Managing Director referenced a quote from a competitor where he estimated future demand. And it struck me, competitors are out of your control, the future is one big lump of stuff you can’t control. And an estimate is a guess. It’s nothing like reality. And it’s not even close to something you can control.
Was the Managing Director aware that even though he was saying he was focusing on what he can control that what he was actually doing was grasping at a squishy straw of guesses about the future from a competitor – all of which was totally beyond his control?
But even if all of those things were in his control, here’s the thing. The things that have in reality wiped more than 90% of the value from the company, indeed even the metric that measures the value of the company, are all beyond the control of the company. And you can’t go on losing more than 90% of the value of the company forever – whether you are in control or not.
In particular, if the share price keeps falling and the commodity price of iron ore keeps falling, at some point you’re not going to have a company anymore.
But no-one said that. Some people spoke about truck technology, some spoke of acquisitions of other companies, I even mentioned corporate governance and diversity. Because it seems what Control Freaks really want to hear is that if the share price and commodity prices start going up, we’re all going to get richer. And what we chose to focus on was the Chairman’s reassurance that “even if the commodity price goes up $10, the profits could go up 500%” . It seems like even when you’ve lost billions of dollars because of factors beyond your control, what you can control is your sense of hope.
So it turns out that us control enthusiasts like to focus our control on simple uncontrollable optimism. How freaky is that?!