My Market, My Roller Coaster

The thrills of a roller coaster may be no match for the white-knuckled excitement of equity ownership, but the amusement park industry can school the corporate heavies in their trade. And it's more than the fact that coasters bank while debt-laden companies don't. As we roll into the thrill park season, it's hard not to admire the open disclosure and personal interaction that park operators employ. Entertain. Interact. If a kid drops an ice cream cone, hustle to fetch her another one.

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By Rick Aristotle Munarriz (TMF Edible)
March 7, 2002

They say the market is like a roller coaster ride. They have said so for decades now, long before Arrow began bending steel to wean the public off the notion that wooden coasters stretched the limits of the thrill ride experience. So, yes, the market was a roller coaster ride in the sense that it had its shares of ups and down in the past. Nowadays, steel behemoths do so much more. They can catapult you into the unknown through the propulsion of linear induction motors. They can hurl you through a series of disorienting inversions. In many ways, today's market is a lot like today's coasters -- it's more than just the ups and downs.

But that analogy and meeting the market's height requirement will only take you so far. See, while a lot of people might associate amusement parks with hype-infesting carnival barkers and dizzying "spin and puke" flat rides, I think publicly traded companies could learn a lot by paying attention to how the country's thrill parks run their business.

For starters, while the midway games are rigged in favor of the house, there is nothing up the operator's sleeve when it comes to rides and attractions. Most parks will post estimated wait times at every major queue. If not, it's easy to see your place in line relative to the ride's capacity. At larger theme parks you will even find manned display boards updating wait times at the more popular attractions throughout the park, kept current all day long.

So if a simple park can produce popularity reports perpetually, shouldn't a billion dollar conglomerate have the technology in place to update its shareholders more than just once every passing quarter? If a roller coaster metropolis can let you know how well each of its attractions is running on any particular day, why are some companies as cryptic as possible in breaking down their own scorecards?

I'm still waiting for the day when a retailer will provide real-time chainwide sales reports to the public through its website. Trust me, it will happen. It may start out as some publicity ploy, the way population tallies get rung up on some Times Square billboard, but once the ball of round-the-clock disclosure starts rolling, it's going to be contagious.

What's a chipmaker got to lose by keeping its investors in the loop on factory production and order fulfillment as it happens? Okay McDonald's (NYSE: MCD), just how many burgers were served today? Granted, there are some cases where too much information will help feed the competition, but only if those who aren't playing by the same rules aren't chastised for their mum-ness. Why can't an industry lay all the cards on the table? How many class action lawsuits do you think would spring up if brutal honesty -- on the fly -- was the norm? Not many.

The problem is that companies weren't raised on the premise of being open, even with their own owners: the shareholders. It's a shame. How long do you think a trolley park would have survived if it turned down all the lights save for a random flash every three months? Not long. But companies were trained to live clandestine lives. They would occasionally toss a bone to analysts or teach a secret handshake to a money manager, creating a pyramid of privileged information, but little else. Yes, Virginia, there are no webcams in the boardroom.

Now that the SEC has rightfully cracked down on selective disclosure, instead of companies opting to open up to everyone they are being tight-lipped all around. It's fair, but it's a copout. Silence is not golden. Truth be told, it's not even good enough for a bronze.

There is nothing wrong with being frank, frankly. When an amusement park has a ride down for maintenance, the ride is closed right away. Patrons aren't blindfolded as attendants make whoosh sounds to keep the fable breathing.

In many parks, if a marquee ride is having problems, a closure sign will be posted out by the ticket booth at the actual park entrance. Hey, you want to buy in? Great, but just so we're covered here, this is what's wrong inside the park today. Still want in? Come on in and thanks for your patronage! It's not a matter of vague boilerplate warnings. It's the real deal, as it happens. Until the day arrives in which market buy and sell orders are only accepted during a brief window of time after a company completes a quarterly conference call, wake up and smell the 7-Eleven (NYSE: SE) coffee. Information never sleeps, only the desire to diffuse it.

How many mistakes do you think a company can repeat while it's in anti-chatty mode just because it's quietly skating figure eights? In Theme Park Land it's obvious when something isn't living up to its intended potential. The folks aren't lining up. The ride is spending more time down in maintenance than in operation. It's obvious to everyone and that mandates action. Parks realize that real estate is an asset. If that space is better served as something else, it becomes something else. My eight-year-old son logging in a few hours of Roller Coaster Tycoon sim-action has walked away with more business sense than some Ivy League minted CEOs.

And, I hope I don't ruffle too many mouthpiece feathers when I say that amusement parks know how to sell their parks better by reaching out to their core audience. I realize that it's easier to hype a new coaster than to tiptoe past open disclosure issues, but take a look at your portfolio for a second. Can you name one head of Investor Relations? If your holdings are wide enough, I bet you don't even know the name of all your CEOs. Am I right?

Park enthusiasts know who is manning the public relations post at their favorite destinations. If you're a member of American Coaster Enthusiasts and show up at Paramount's King's Island well before the turnstiles start clicking, Jeff Siebert will walk you to the back of the park for an early ride. If you think Cedar Point is getting way too much exposure lately, you can thank the husband and wife team of Brian and Janice Witherow for working their media magic. Want to know why a small park in rural Indiana always turns up at the top of award lists? It's because Holiday World's Paula Werne is bending over backwards to keep voting enthusiasts happy by hosting late night special events at the park and posting in roller coaster newsgroups and discussion forums like

When was the last time you saw a CEO or the head of a company's investor relations department chime in on an online discussion board? We've had a few do so on our boards, but way too many choose to lurk or, far worse, decide to never venture out into cyberspace to gauge the pulse of the shareholding mindset. The discourse doesn't have to be incriminating. You want to know when there is no interest in pulling back the curtain? Well, it's when there is no curtain.

Aren't we all in this together? If a company's best investor isn't an educated one, trust me, you don't want to go on that ride.

Rick Aristotle Munarriz enjoys the stock market and amusement parks. He prefers wood to steel and lap bars to overhead seat restraints. He mailed out his ACE family membership application this week and got the Rollercoaster Loving Fools forum started here last month. Rick's stock holdings can be viewed online, as can the Fool's disclosure policy.