Sandbag

When a flood is imminent, people put bags of sand against the shores of rivers and lakes. The idea is that the sand absorbs the water and slows the flooding, hopefully saving a few basements along the way.

When a company sandbags, they try to keep estimates of financials pretty conservative. They publish underwhelming numbers so that, when the real numbers come in, the company looks that much better.

Want Wall Street to love you, Madame CEO? Underpromise. Overdeliver. You conveyed to the Street you’d be thrilled with earning a dollar a share next year. And when the year is done, you look back and note that you printed a dollar-thirty.

What’d you do? You sandbagged. When a flood is imminent, people put bags of sand against the shores of rivers and lakes. The idea is that the sand absorbs the water and slows the flooding, hopefully saving a few basements along the way.

When a company sandbags, they try to keep estimates of financials extremely conservative. They publish vastly underwhelming numbers, so that when the real numbers come in, the company looks heroic. By sandbagging, they set the bar low. Like a 2-foot-tall hurdle, so that when they successfully leap over those hurdles, with tons of clearance, they look like gazelles...which, unfortunately, have been banned from Olympic competition.