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Bungle in the Google
Research director's IPO bust

Not all scientific research holds up over time. For evidence of that, unfortunately, we at the Five Dumbest Things Research Lab don't have to look far.

Yes, exercising the critical assessment that's necessary for intellectual progress, we at the lab decided to spend this past week reviewing the research we've already published this year. Our mission was to find the reports that, in hindsight, were misguided or just plain stupid. Our dream was to learn from our mistakes.

So here are the results of our inquiry: the lab's selection of the dumbest dumb things of the year.

1. Wake Us Up When It's Overture

Back on Oct. 31, we fearlessly predicted that Google, the privately held search engine company,

would, within a month, file papers at the

Securities and Exchange Commission

in preparation for an initial public offering of stock.

But when November closed with no Google IPO filing, we were proven wrong. As the days wear on, it becomes ever clearer that we weren't even close.

Where did we go wrong? For starters, we relied on the flimsiest of evidence. One piece was Google's reticence at a high-profile search engine conference. In hindsight, we should have paid more attention to the fact that Google's nonparticipation wasn't a sudden pullback -- a sign of companies' typical publicity shyness in the month preceding their filing of IPO documents. No, it seems Google never planned to have much of a presence there in the first place.

The second piece of weak evidence was a Google executive's cancellation of a meeting with the research lab. At the time, we thought, "Aha! A sign of that pre-IPO publicity pullback."

But now? Now we think you don't need that good a reason to cancel out on the research lab.

Behind our bad call, we suspect, was our overwhelming desire to be famously prescient. All we could think of, as we weighed our possible forecast, was, what if we say nothing at all, but Google ends up going public? How cruddy will we feel


, having missed our chance to look smart?

So away we went. Look how smart we look now.

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IHOP-pily Ever After
Research director's pancake-prediction flop

2. Pancake Makeup

Back in January, we thought we knocked



, the pancake house, flat with our analysis.

Now we're not so sure.

At the time, we drew frightening conclusions, for both IHOP and the economy, from the restaurant chain's announcement of a promotion to sell its trademark pancakes on an all-you-can-eat basis for $3.99 -- the same price IHOP usually charged for a five-pancake stack.

Hah! we thought. "Now that Starbucks Coffee (SBUX) - Get Starbucks Corporation Report has persuaded people to spend $4 for a cup of caffeine, does it make sense for the java giant to sell a 'bottomless cup of coffee'?"

By giving away its signature dish so cheaply, we wrote, IHOP is devaluing it. Not only that, IHOP's move is another sign of the deflationary whirlpool that's sucking prices downward across the nation.

Well, 11 months later, the


has decided deflation isn't the threat it once was. And at IHOP itself, it doesn't appear that the all-you-can-eat promotion deflated pancake prices later in the year. Comparable-store sales are up 4.4% for the first nine months of the year, and the company indicated in August that its pricing has held up.

Obviously, we don't know flapjack.

3. You Can't Ford to Take Advice From Us

Pancake pricing, however, wasn't the only area in which our predictive powers whiffed.

One of our recurring strategies was to call attention to companies with particularly memorable accounting missteps, then to make snide hints about the wisdom of putting one's 401(k) money with those folks.

Back in February, when hospital operator

Universal Health Services

(UHS) - Get Universal Health Services, Inc. Class B Report

came up with confusing explanations about why its chief financial officer had stepped down, we cast ourselves on the side of the company's baffled analysts, one of whom announced, "I'm old enough to know bull ... when I hear it. ... You're asking us to believe a totally bizarre explanation."

Research director hit by Ford truck

And we made fun of pharmacy services company

Accredo Health


in June for not only raising fiscal-year guidance less than a month after it lowered it, but also firing and suing its accountant.

Red flags all over the place, we thought.

So, what would have happened had you invested in these companies when we warned you off of them? Well, you would have done pretty well. Last we checked, Universal Health is up 35%. Accredo Health is up 72%.

One of our most explicit downgrades of the year came in July, when we made fun of Ford's (F) - Get Ford Motor Company Report elevation of designer J Mays.

This cult of personality smelled desperate to us. "Time to short Ford," we wrote.

Well, say what you will about Ford's long-term prospects. But the five months since we wrote that have turned out to be probably the worst such stretch over the past two-and-a-half years for shorting Ford. The stock, last we checked, is up 23%.

We at the research lab like to think of ourselves as leading indicators. But more than we'd like to admit, we're behind the curve.

4. A Michigan Is as Good as a Mile

One of the problems with researching Dumb things day after day is that you see Dumbness everywhere -- even where it isn't.

Like a security guard who sees everyone in the store as a potential shoplifter, we at the lab expect every yet-to-be-decided decision will be a Dumb one. It's become a nasty habit.

Dunked in Lake Michigan
Research director drowns in arrogance

Which brings us to

the rant we published this summer about the U.S. Mint's

50 State Quarter Program.

This program -- an effort to mint a quarter commemorating each state over 10 years -- had given rise to some stupendously ugly coins, we wrote.

In fact, the states had exhibited such lousy taste in design, we had no doubt that Michigan, whose quarter is due out in 2004, would choose one of the four ugliest designs out of the five published candidates for the official quarter.

Well, guess what? When Michigan's governor announced the winning design on Oct. 1, it was our favorite: an uncluttered rendering of Michigan among the five Great Lakes.

We've got to stop insulting the rest of the world: It isn't as dumb as we think it is.

5. A Cry for Alpo

Finally, we should acknowledge that on numerous occasions over the past year, readers have submitted their own nominations for dumb Dumbest Things.

Often, these criticisms don't target a specific item but take issue with the general nature of the research lab and its work. These comments run along the lines of "You suck," "You're wasting my time by not writing about hot stocks I can invest in," and the ever-popular "The sixth dumbest thing is



Since you've read down this far, we'll be presumptuous enough to assume you don't question the research lab's very right to exist. Instead, we'll spotlight a particular letter that came in response to

an item we wrote this summer about dumb goings-on in the U.S. Congress as our elected representatives wasted time instead of fixing weaknesses in the system intended to safeguard the pensions of millions of Americans.

"Of course," we wrote, "maybe our elected representatives don't quite understand the urgency of the issue -- living a retirement that doesn't involve dog food for dinner."

That aside provoked this email from an anonymous reader: "I'm so sick of the analogy involving being poor and dog food. I have a dog, do you know how much dog food costs? A small bag costs the same as five or six cans of soup and a month's supply of macaroni and cheese."

Bow-Wow Prediction
Research director, get your pooper-scooper!

Ouch. A minor point, but it stung anyway. No, we don't have a dog. No, we had no idea of how much dog food costs. And we priced a can of name-brand dog food at the A&P this week, we learned it costs about $1.08 a pound -- less than one-third the price of ground chuck, but no wild bargain compared with soup or mac and cheese or other food marketed to humans.

Instead, with our figurative tail between our legs, we admit that the dog-food-eating-senior phenomenon is something we read about 20 years ago. We have no idea if such seniors exist, or ever did. We just threw it in without thinking about it. And we got caught.

We have nothing against dumbness, of course. We just like it to stand up under scrutiny.

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