Have you ever read a stock prospectus? Hopefully not. They’re kinda long and mostly super boring. But there’s always a section called “Risk Factors” that explains the risks related to the company — in other words, the things that could go wrong and cause the stock to plummet.
Here’s an example from an old Goldman Sachs prospectus we found online:
Our Computer Systems and Those of Third
Parties May Not Achieve Year 2000 Readiness —
Year 2000 Readiness Disclosure
Consequently, on January 1, 2000, computers that are not Year 2000 compliant may read the year as 1900. Systems that calculate, compare or sort using the incorrect date may malfunction.
Turns out the Y2K bug wasn’t actually a big deal. Sometimes risks are just perceived. In other cases, they’re very real. Like the part of the Goldman prospectus that said there may be a “period of market decline or weakness that will leave us operating in a difficult market environment.” Hello, Global Financial Crisis!
Anyway, as part of PHT’s 2014-15 NHL season preview, we’re going to apply the “Risk Factors” model to all 30 teams. We’ll list three things that could go wrong for each club. Some of them won’t turn out to be a big deal; some of them will. Either way, YOU WILL HAVE BEEN WARNED.
Now, obviously, these posts are going to have a pessimistic feel to them. It doesn’t mean we hate your favorite team. We don’t. (OK, we might. But we’ll never admit it.)
Tomorrow morning we’re going to kick things off with the Boston Bruins, a team we all hate.
We hope you enjoy the series.