Finance: What is Sandbagging?

Sandbagging is the practice of keeping financial estimates conservative so that they are more likely to exceed expectations. We do a similar thing at work. Always under promise, always over deliver.

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Transcript

00:28

people put bags of sand against the shores of rivers and lakes the idea is [A flooded living room appears]

00:33

that the sand absorbs the water and slows the flooding hopefully saving a

00:38

few basements along the way when a company sandbags they try to keep

00:42

estimates of financials extremely conservative they publish vastly

00:46

underwhelming numbers so that when the real numbers come in while the company [Newspaper of company earnings appear]

00:50

looks heroic by sandbagging they set the bar low like a two-foot tall hurdle so

00:56

that when they successfully leap over those hurdles with tons of clearance [A deer jumping over hurdles]

01:00

well they look like gazelles which unfortunately have been banned from

01:04

Olympic competition doping who would have guessed?