Wall Street Weak

IN JULY, THOUGH I hardly belonged in their company, I found myself at a dinner with several investment analysts. All exuded what Mark Twain called “the calm confidence of a Christian holding four aces.”

I wonder how they feel now. Though the market has recovered from its Aug. 31 plummet, they cannot be as smug as they were in July. The Dow is unstable, Clinton is out to lunch, and we may be headed for a new round of international crises.

It’s time not only for a market correction, but for an attitude adjustment. American business has lost sight of what it’s really about.

Take direct marketing, which has now surrendered totally to the Wall Street mentality.

Old-time DMers checked their orders when they arrived at work every morning. Now they check their stock prices.

Catalogers once worried about swollen inventory. Now they think only about their multiples.

IPOs are now a hotter topic than editorial content in magazine boardrooms.

Ralph Nader is right when he says consumers are getting lost in the shuffle.

And that brings us back to that overused but little understood piece of corporatespeak: “core competency.” Cendant didn’t end up in the trouble it’s in because it kept its eye on basic direct marketing disciplines-it was trying to impress the market, and the self-proclaimed experts who analyze it.

Direct marketing has always been a hands-on business, operating with a numerical logic all its own. The veteran DMer accepts, for example, that a return on investment takes some time. You invest in a database, and in your fall mailing. The payout comes later.

But these values are being lost as accountants with little knowledge of direct marketing position firms for merger or IPO. You’d better memorize your Arthur Hughes before you try to sell a program to these guys.

This overemphasis on market values is as out of hand in government as it is in business. For example, a planhas been floated to turn Social Security retirement accounts into individual investment portfolios. (Great. We don’t have enough casinos and lotteries in this country-the financially illiterate will now be asked to gamble with their meager SS funds.)

But it’s sad to see it happen in direct marketing. Whatever happened to the entrepreneurial wildcat who started a business because he had a talent for it, and was uncontrollably motivated to do it?

He is, as Peter Mayle wrote describing agency owners, learning to adjust his behavior so he can reassure investors. Jeans are out, suits are in, and “any tendencies to rant or say the word f- after every other word will have to be controlled. The editor of The Wall Street Journal will not be amused.”