The 10 Stupidest Statements Ever Made in the History of Capitalism

As Forrest Gump might say, in surveying this sampling of predictions from the business world's supposedly astute players: 'Stupid is, as stupid does.'
By John Persinos ,

The so-called "experts" within the interlocking worlds of finance, business and technology often utter fatuous remarks that lead investors astray. Here's the list below of the 10 dumbest statements ever made by Wall Street, corporate and high-tech insiders. Each dopey utterance shows how dangerous it can be to rely on self-appointed oracles.

See if you can read the statements below without wincing or slapping your hand on your forehead. The list starts with the absolute worst business prediction since the dawn of capitalism:

1) "There is no reason anyone would want a computer in their home."

Ken Olson, founder, Digital Equipment Corp. (DEC), speaking in 1977 about the burgeoning personal computer industry and the ascendancy of its stocks.

As upstarts such as Apple soared, revolutionized society, and made billions of dollars, Olson never was able to re-position his once-mighty company, which made "minicomputers" for businesses. Over the years the floundering company's assets were sold to various other companies, such as Compaq. DEC merged with Hewlett-Packard in 2002, which ceased to use the DEC name.


2) "Not to mince words, Mr. Epstein, but we don't like your boys' sound. Groups are out; four-piece groups with guitars particularly are finished."

Dick Rowe, executive in charge of evaluating new talent for the London office of Decca Records, 1962.

Record industry executive Mr. Rowe showed himself to be the "Fool on the Hill" with his harshly dismissive evaluation of The Beatles. It's one thing to miss a single fad or opportunity; it's quite another to denigrate a musical group that went on to launch a global mania, permanently change the wider culture and earn phenomenal amounts of money for everyone concerned.


3) "The three- to five-year earnings projections of more than a thousand analysts, though exhibiting some signs of flattening in recent months, have generally held firm. Such expectations, should they persist, bode well for continued capital deepening and sustained growth."

Fed Chairman Alan Greenspan, December 2000

Yeah. Sure. Right. Instead of going up and up and up, as the usually cryptic Greenspan predicted, the market fell and fell and fell. And then fell some more. In fact, his expectations turned out to be so wrong, he later admitted that his essential beliefs about the market, patterned after the laissez-faire philosophies of Ayn Rand and Adam Smith, were shaken to the core. It was a startling admission for an influential man once seen as virtually infallible. That's why, instead of relying on the pronouncements of "wise men," you should do your homework.



4) "Some fear a burst Internet bubble, but our analysis shows that Internet companies account for only 7% of the overall Nasdaq market cap but carry expected long-term growth rates twice those of other rapidly growing segments within tech."

Joseph Battipaglia, market analyst, December 1999

About three months later, in March 2000, the high-tech bubble burst and the Internet Index lost two-thirds of its value. All told, the Nasdaq lost 50% in 2000. These companies that Battipagia cited as having "expected long-term growth rates" were actually stocks trading at extremely high price-to-earnings (P/E) ratios, even though the companies themselves often weren't making any money. Many of these companies disappeared, like spit on a griddle, taking investors' money with them.


5) "There is practically no chance communications space satellites will be used to provide better telephone, telegraph, television, or radio service inside the United States."

FCC Commissioner T.A.M. Craven, 1961

Previous to helming the Federal Communications Commission, Craven was a United States Navy officer involved in the development of radio and communications. Allegedly trained as an engineer, he must have skipped a few classes in college.

Without space satellites, modern society would crumble, anarchy would reign, and the human race would plunge into a new Dark Age. 'Nuff said.


6) "Television won't last because people will soon get tired of staring at a plywood box every night."

Darryl Zanuck, movie producer, 20th Century Fox, 1946

As Marshall McLuhan famously wrote, "the medium is the message." And the number one medium in the world for the last 70 years has been the boob tube. TV not only conveys information; it defines reality. Despite the advent of the Internet and a host of other high-tech distractions, the average American still stares at that box more than eight hours every day -- many of them watching programming produced by what's now called Twenty-First Century Fox.



7) "We believe all this bodes well for improved earnings visibility and performance assessment, suggesting that the company is making progress at getting back on track."

Ronald Barone, analyst at financial services giant UBS, October 2001, commenting on energy giant Enron, after the company reported third-quarter earnings.

The Enron scandal broke that month, eventually leading to the company's ignominious downfall, wiping out investors and landing its key executives in prison. Instead of being "back on track," Enron was found to have perpetrated a host of crimes, including hidden partnerships, masked debt and manipulation of energy markets.


8)"640K ought to be enough for anybody."

Bill Gates, 1981

Maybe it's because of his supreme self-confidence, but it's always fun to take swipes at the billionaire tech titan Bill Gates, founder of Microsoft. Or maybe, for those of us old enough, it's the still painful memory of trying to grapple with MS-DOS. Back when Gates made this prediction, the leap in memory capacity from 64K to 640K seemed sufficient to last a long, long time. It sure didn't.



9) "What use could this company make of an electrical toy?"

William Orton, president, Western Union Telegraph Company, 1876

Mr. Orton made this mind-bogglingly misguided assessment after being offered the chance to buy the patent for the telephone. In the late 19th century, the telephone of course was the Internet of its day -- perhaps even more transformative. Telegram for Mr. Orton: You blew it.


10)"I think there is a world market for maybe five computers."

Thomas Watson, chairman of IBM, 1943.

We're cutting Watson some slack here and ranking this as the least stupid statement on our list, because he made it as far back as 1943. Nonetheless, the legendary IBM honcho couldn't have been more ridiculously off base.

Speaking of mistakes, are you making the right investment moves? Or are you committing blunders that will ruin your retirement years? To ensure you don't outlive your money, download our free special report: The Ultimate Retirement Guide.

John Persinos is editorial manager and investment analyst at Investing Daily. At the time of publication, the author held no positions in the stocks mentioned.

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