The market’s cautious start today could be related to a weekend report pointing to the property bubble in China and the effects the bubble could eventually have across the globe. However, buyers did come back in the afternoon to get the averages in the green.
Commodity-related companies were the first to feel investor concerns, with names like PetroChina (PTR) and Agrium (AGU) just a couple of examples where investors were selling first and asking questions later. Warren Buffett’s Berkshire Hathaway (BRK-A), which was lower earlier following the company’s Friday afternoon earnings release, did notch a slight gain by the close. Mr. Buffett himself was a bit disappointed with the company’s performance, although shares have been trading at all-time highs recently.
I have always been infatuated by numbers, regardless of the context. Being a big sports fan, I tend to look at numbers in the form of stats and player salaries. Being in South Jersey, we have been excited by the success of local product Mike Trout, who hails from Millville, NJ. Trout tore up the major leagues last year, finishing first for rookie of the year and second in MVP voting for the American League — at the ripe old age of 20.
This past weekend we learned the Angels bumped up Mike Trout’s 2013 salary by $20K to $510K. Now most baseball fans will look at that stat and laugh. Talk about the biggest baseball bargain contract around! This “generous” raise came from a team that just spent over $440 million on three different player contracts in the last two seasons (outfielder Josh Hamilton, first baseman Albert Pujols, and pitcher C.J. Wilson). It was no surprise to hear the Angels’ star and his agent were not too happy with the offer, but his young age and lack of years in the league prevent him from having much financial leverage in a contract.
Now most people who are working to make ends meet will not feel much empathy for Mr. Trout, but when it comes to the Angels’ handling of the deal, they referenced to their team policy in dealing with rookie contracts (raises tend to be minimal). It’s possible the team will give Mr. Trout a decent deal in the next year or two for good faith, but this year’s deal may leave quite an impression for years to come.
Organizations can sometimes let policy blind the reality of a situation, which in turn can strain and permanently affect relationships beyond repair. Anyone who has or is running a company may be able to relate to finding and wanting to keep the best talent they can find. But too often management blunders when it comes to financial and other sort of compensation let what would have been smart business turn into future uncertainty, or the company being forced to make changes no one would have seen coming or were planning for. The Angels are likely quickly realizing their policy approach isn’t going over well with Mr. Trout, his agent, and fans who fear the team may have sent the young star a confusing message about the direction of the organization in the years ahead.
It is ultra-important for every one of us to do their job to the best of their ability so that one day, you too, may be in a situation like Mr. Trout. The professional that he is will result in letting his performance speak for itself — whether his current organization ever truly understands his worth to the franchise.
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