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Learning From Mistakes


If you trade actively, and we do, you will make mistakes.

"Strong people make as many mistakes as weak people. Difference is that strong people admit their mistakes, laugh at them, learn from them. That is how they become strong." -- Richard Needham

Mistakes -- we've all made 'em. If you trade actively, and we do, you will make mistakes. It comes with the territory. When you make 50-100 trades per week, you'll have plenty that make you look like a genius and some that make you appear to be the village idiot. As Mr. Needham said, strong people admit their mistakes and learn from them. However, that doesn't seem to be the case with the country-music trio the Dixie Chicks.

Let's flash back to 2003, with the Chicks riding an incredible wave of popularity as the first female group in chart history to have three albums debut at No. 1. That was when their lead singer Natalie Maines said on stage in London, "Just so you know, we're ashamed the president of the United States is from Texas." The backlash against the Chicks was swift, as they had basically called out a favorite of red states in a music genre that pulls heavily from that demographic.

Their last tour, the one in which Maines made that comment about the president, earned the group upward of $61 million in revenue, and anyone who follows the music scene knows that concert tours are really where the artists make their serious dough. In fact, they stood to make as much as 95% of the gross of this year's aptly named "Accidents & Accusations" tour.

Let's do some math on this one. Hypothetically, if the Dixie Chicks sell 1 million CDs for $10 each, which is $10 million gross, they might net $3 million to $5 million in profits. On the other hand, if the concert tour pulls in $50 million, then they could take home approximately $45 million. So by not admitting their mistakes the Chicks didn't just kiss off $3-$5 million, they kissed off at least 10 times that amount.

Indeed the Dixie Chicks have not been willing to tell anyone they've made a mistake, and even though their latest CD (you didn't think I was going to call it an album, did you?) was No. 1 for two weeks, their single "Not Ready to Make Nice," which is in reference to Ms. Maines' 2003 statement, hasn't garnered commensurate national radio airplay.

It also seems their tour is in deep trouble. I've read that as many as half their U.S. dates may be canceled. In fact, even liberal bastions like New York and Boston, where the Chicks had planned multiple dates, will likely see those additional dates canceled.

It's easy to see how one mistake, piled on top of another, has hurt the Chicks financially, but now they are too far down the road to admit they've made mistakes and we all know where that leads. Hmm, I bought in at $20, it fell to $15, and I added to it and at $10 I loaded the boat. That never happens does it?

Sure, being on the cover of Time magazine is great exposure, and perhaps some fans were ready to forgive and forget, but when the Chicks offend their base with comments like, "We don't want those kinds of fans. They limit what you can do," you have to wonder what they are smoking.

For the tenacious no road is impassable!
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No positions in stocks mentioned.
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