Sunday, November 19, 2006

greener grass?

The general theme of my big post two weeks ago was that the grass isn't always greener on the other side. It's easy to be seduced by tales of higher wages and bonuses and better hours and the likes, but from what I've seen, most of it is bunk. I've heard pretty ridiculous figures that are usually flat out wrong, by which I mean lies. It's either that or the company actually pays that much, but excessively high wages are usually the mark of a poor business model. Compensation is one of the few expenses an otherwise well-run company actually has any control over.

Case in point, a small competitor of Schlumberger's Well Services segment called Superior Well Services. (If their real website wasn't so obnoxious, I might have actually linked to it instead of their ticker symbol. You'll have to find it on your own if you really want to go there, but sound effects, moving logo, black background, frames within frames? Please, this is worse than that ridiculous website some friends of mine made in high school. Yeah, a couple of you know what I'm taking about.) Anyway, Superior has several districts scattered around the country that, if combined, have an aggregate size around five times the Farmington district I work at. Taking a look at their income statement reveals how much they made last year. That figure is about what our one district in Farmington will make this year. I will concede that the quarterly data for Superior's first three quarters of this current year are far better than their previous year. Fortunes of nearly everyone in the oil and gas service industry are rising, especially for marginal players that can service operators' expanding exploration and production efforts. Unfortunately for those players, the next industry downturn will be especially painful. However, I would be more interested with the insider selling by a bunch of people with the same last name. I suppose some original founders and investors wanted to cash out. Anyway, financials aside, Superior pays their operators a lot more than what I perceive industry average to be and that plays a large part in their margins and that will ultimately hurt them when margins get squeezed.

That sidebar went on much longer than necessary, probably because I've seen us lose people to Superior. Back to the greener grass idea, I'm much more interested in those who lie about how much they make and how much others could be making working alongside them. I understand why people lie in their sales pitches about how much money new employees can make. They're trying to attract new employees to keep up during this boom time in the industry. What's far more fascinating is what those lies say about the people who make them, especially lies about how much they make. Speaking anecdotally, people who lie about the amount of money they make are possibly deluded about how much they make, which usually makes them poor managers of their money. They also covet money, not in a need to pay the bills sort of way, but more in a need to validate their existence y exchanging their money for possessions sort of way. They are possibly happy now, because they are making lots of money (or so they say) but would be miserable without it.

1 comment:

Anonymous said...

May be they just wanted to save money and let their little high school kids design their web-site for free. I know, I know, you guys could have done a better job than this when you were in high school.

By selling lots of stocks (inside-trade), may be these people with the same last name wanted to start a revolution somewhere in Central/South America. Presidents Chavéz & Castro need some friends from the U.S., especialy the ones from the oil industry.

As you already know, many companies, especially from the Wall Street, they are only looking for the short term profits to please the stock holders and fill their own coffers as much as they can within a very short period. That's why we have the Enrons of the world. Why would this company be different? Who cares about the next downturn.