Monday, October 29, 2007

Did O'Neal Play Too Much Golf?

CNBC had a report this afternoon on Stan O'Neal's golfing, claiming that he was pulling a Nero while Merrill burned. This is the same nonsense that the press trotted out during the Bear Stearns subprime mess. A number of reporters claimed that Bear Stearns CEO James Cayne was out playing golf while major problems were surfacing at Bear.

Is it truly nonsense, unless of course you are so uninformed as to believe that the CEO of a major brokerage firm is the person making the daily decisions and needs to be on top of ever aspect of the firm's business on a day to day, hour by hour basis.

So the concept that playing golf while a press release is being released is indicative of poor management is just silly, but but I did decide to take a look at Mr. O'Neal's golf rounds. In this Internet age, there are no secrets. Think you can sneak out of work in the afternoon and play a round? Well, if you play with a USGA handicap, you really can't - because your handicap, and your last 20 rounds of golf, are public information.

But using the public handicap records to examine a CEO's conduct is just silly. Add to the mix that you are assuming that the dates that the CEO puts down are correct, which is a huge assumption. The handicap system does not require the exact date of the golf round.

Stan O'Neal's dates are not correct. For example, he is posted 4 rounds of golf with a date of August 19, at three different clubs. But more to the point, while I don't know Mr. O'Neal, I am pretty confident in saying that he did not play 4 rounds of golf, at three different courses, in a single day. What I am confident he did is that he played one round of golf at his home course on August 19 - a Sunday - and posted his scores from his last three rounds while he was at the club - and forgot to change the date.

He also has three rounds posted with a date of September 22 at three different courses - Purchase, Shinnecock and Waccabuc Country Club. According to Google Maps, it would take 4 hours to drive from Shinnecock to Purchase to Waccabuc. Add in 4 hours for the round of golf, and to believe the dates in the the handicap system would be to believe that Mr. O'Neal played golf for a minimum of 16 hours on September 22. I hope I don't have to remind anyone that there were not 16 hours of daylight on September 22 (there were only 12 hours between sunrise and sunset on that day), never mind the physical exhaustion if one were to attempt to play three rounds of golf interspersed with 4 hours of driving in a single day - and his scores wer 80, 89 and 90!

This raises another interesting issue, which I am sure that someone will jump on. Most of the dates of postings of scores for Mr. O'Neal are weekends or holidays. But there are 4 times that he posted more than one score on those dates. Was Mr. O'Neal aware, from the Cayne nonsense, of the possibility of someone checking his rounds, and therefore intentionally did not post with the correct dates, in order to conceal his golf rounds?

Pure nonsense of course, but I'd make a small wager that someone comes up with this theory.
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