We've Got a Lot of What It Takes to Get Along

Dear God,

Entergy's valuation as a company has always reminded me more of the housing market than the stock market, and this week it's seeming like I'm right, as usual. Stocks go up and down, but home prices climbed for 13 years straight on a steep, dizzying slope. By the time 10 years were up they had doubled, and the climb just continued. No one ever recognized that houses could become devalued.

What could be more solid than Entergy, a company that produces energy that is "safe, clean, and reliable?" (Please follow that link and learn more about that.) Nothing! That's why CEO J. Wayne Leonard's income is climbing; he made $14.8 million in 2006 and $26.2 million during 2007. Over this last 52-week period, Entergy share prices were up 14%.

But now the bubble has burst, or at least some stinky gas is beginning to seep out. Entergy's stock price fell 3.2% in one afternoon this week alone. This was after the Banc of America downgraded Entergy's "buy" classification to "neutral," expressing concern about the effect that political resistance to Entergy's spin-off, Enexus, will have on Enexus' debt burden.

In a statement, Banc of America said, "In our view, the stock price is not discounting the regulatory risks enough."

They'd like to see better risk management. As would the activists, though their concerns about risk aren't limited to money, and we make a practice of not listening to them. But what does "risk" mean, anyway? It's just the chance of being wrong. And being wrong about money and, indeed, wrong about safety has always worked to our advantage before.

So why isn't our regular approach to truth vs. reality working for us anymore, Lord? Is the world at large about to stop buying our lies? Do we have a Plan B, Lord? Do you?

Amen,

Fake-Rob