Take credit for good things you don't cause. Put out a well-timed press release that can be generally vague about anything that can be perceived as a positive business development right around the time your stock price is surging from a short squeeze.
Psychologist Justin Barrett came up with an explanation for most people’s innate desire to “believe” and calls it our Hyperactive Agency Detection Device, which is hard-wired into human brains. HADD is essentially a tendency for humans to perceive agency or ascribe random actions and ambiguous stimuli to an animate agent when one is neither present nor necessary to explain certain actions and outcomes. For example if there is a rustle in the bushes from the wind, humans will immediately ascribe that movement to an agent, either a dangerous animal or other human being. This is a psychological tendency driven by evolution and likely saved many lives by causing humans to be scared of tigers in the bush. More specifically, the way to take credit for good things that you do not cause is to put out a well-timed press release that can be generally vague about anything that can be perceived as a positive business development right around the time your stock price is surging. If your stock is doing well in a powerful bull market rally, or paradoxically, it is subject to a short squeeze because your prospects are so terrible that your stock has become a crowded short, you want to put out a PR so that people assign the positive stock move/short squeeze to your genius and/or “positive” news, which is in fact meaningless fluff. Human’s HADD will kick in and attribute the move to you or your actions and become conditioned to chase the stock higher anytime a press release is circulated. If you lack the imagination to come up with a new fluffy PR piece, simply re-circulate something that is old news just to reinforce the conditioning. In this environment the market will buy the rumor, and then buy the news, too.
Release: http://investors.zillowgroup.com/releasedetail.cfm?releaseid=837607
Recirculate:
http://www.zillow.com/blog/pro/zillow-powers-chinese-site-leju-112990/
For bad news and negative stock price action, utilize Law #13 and blame someone--or better yet--something else. If you are a retailer and have a good quarter, credit your merchandising decisions and tight inventory control. If you have a bad quarter, blame the weather or a weak environment and other competitors for being so promotional. An obvious corollary to Law #25 is to attribute industry strength (or one-time revenue windfalls due to positive black swan/extenuating circumstances completely outside of your control) to your company's specific operating decisions and competitive strengths. Do this even when and especially when your revenue growth is lagging behind other peers in the industry (and thus you are losing market share).
Authority: Ward Nye, The Aggregates Guy. C. Howard Nye, CEO of Martin Marietta Materials ($MLM for you "home-gamers"). Mr. Nye is one of the best hypesters I am aware of in the market. His public hyping, er...speaking, skills would put Bill Clinton's to shame. Martin Marietta's business is incapable of generating much positive free cash flow over a full economic cycle (Enterprise Value is at 80x last twelve months FCF, and 9.6x cumulative 10-year FCF, 19x cumlative 5-year FCF and 96x trailing 3-year average FCF, so in other words this business is valued at ~100x normalized FCF). An objective look at the financial results demonstrate that the company is simply and hopelessly entirely at the whims of the broader economic cycles.
Nye on MLM's Q1 2015 conference call: "As announced in this morning's release, we reported a first quarter profit for the first time since 2008, another validation of our recent growth initiatives and cost management programs." Here MLM finally achieves profitability just six years into economic expansion and Nye adeptly credits this to his growth initiatives and cost management programs, despite mentioning a focus on costs on every previous conference call also. Never mind the collapse of energy costs (inputs) and improving construction end markets and record Texas Department of Transportation (and other key states) budget. It is their cost management programs that are delivering results. When you have positive results that are due to factors out of your control such as a generally improving economy for your sunset industry that is tied to GDP growth, take credit and attribute them to your own idiosyncratic initiatives. When you have negative results attribute them to those same exogenous factors that drove your positive results.
Reversal of the Law: If the market has swallowed your hype hook, line, and sinker sometimes it is in your best interest to simply stay radio silent. Imagination is the first faculty of man, thus periodically being silent while your stock price is surging lets investors' collective imagination run wild about what possible good news or positive new developments could be coming (with the implication being that others know something they don't).
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