Cockroach Theory

Cockroach Theory

A non-scientific market theory that bad news comes in large bunches, rather than a little at a time. In other words, the cockroach theory states that if one company in a sector or industry is revealed to have problems, it is likely that other companies in the same sector or industry have problems as well. For example, when it was revealed that Enron's accounting had been deliberately falsified, it was soon known that other companies, notably WorldCom, also had massive accounting problems. See also: Enron scandal.
References in periodicals archive ?
The present fuss about the government-approved company bonuses of the bailout company officials and the campaign donations to the politicians reminds me of the cockroach theory: "Politicians and bureaucrats in some ways resemble cockroaches--it is not what they steal and carry off that hurts so much--it is what they fall into and mess up!"
But in light of the Walski case, I also must pay reluctant attention to what some have called "the cockroach theory of journalism." It goes like this: Turn on the kitchen light at night and, if you see one cockroach, you can bet there are dozens--maybe even hundreds--more nearby, but unseen.
(I refer to this as "the cockroach theory of design.") Our greatest success was activating the entire playing area--getting the actors moving in the thrust configuration rather than side-to-side.