Paul V. Azzopardi

Amazon Q1: Beats Expectations, Highlights Kindle 2 Success

Forecast low, come in high, and keep them smiling is nothing new to Apple and Amazon. For example, it has been used by Warren Buffett for ages. I read all his reports, including his early partnership ones, and one of the great lessons from him is how to manage others' expectations.

I used to be a corporate adviser and whenever my clients did not stick to this simple advice they managed to get in trouble (suppliers and unions demanding more) before they even reported the forecasted rosy earnings.

Another twist, often made use of by Buffett, is to attribute last period's good profits to some fluke, that you were blessed by a set of circumstances unlikely to repeat (so how can you pay higher wages?). This will win you another year.

I must confress that as a young man I used to keep my parents happy this way, too, by always making them expect low marks in my exams - in this way average made them smile, while above average got them exhilarated. They both knew I was doing this, of course, but preferred it to the alternative and so they played along.