Price of Oil - Avoiding Common Pitfalls During an Industry Downturn

Keeping Your Head When Those About You Are Losing Theirs – Avoiding common pitfalls during an industry downturn

During the oil and gas downturn of the mid-1980s, a bumper sticker was seen in Texas and Louisiana: “Please, God, grant me one more oil boom and I promise this time I won’t blow it.”  But of course, there were more booms, and most people still blew it.  The industry seems to be incapable of learning from history.  When oil & gas prices are high, companies behave as though the good times will never end; when prices drop, companies slash costs and payrolls as though prices will never rise again.

Much of this behavior is driven by shareholder expectations.  However, there are a number of common pitfalls in logic and decision making that can and should be avoided during a downturn.  These include:

-              Adopting a gambler’s attitude toward risk

-              The endowment phenomenon

-              The immediacy phenomenon

-              Considering sunk costs when making decisions

-              Seeking validation

-              Falling into Groupthink

-              Excessive risk aversion

-              Failure to consider competitors’ perspectives and possible actions

-              Embracing and implementing the first potential solution that presents itself

This talk will explore these traps and discuss how to avoid them

Register for a season pass

Location: Texas A&M Mays Business School at CityCentre
842 W . Sam Houston Parkway North Suite 200
Houston , TX 77024

Date: Oct. 19, 2016, 4 p.m. - Oct. 19, 2016, 5:45 p.m.