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Rio Tinto CEO Tom AlbaneseTibor Kolley/The Globe and Mail

If the massive writedowns over the past year don't convince chief executive officers, investors and bankers that bulking up isn't always the best option, nothing ever will.

It's a particularly important lesson for miners. The past year's seen enormous writedowns, including a $2.5-billion charge at Kinross Gold Corp., a $2.84-billion (U.S.) impairment at BHP Billiton, and now a $14-billion (Canadian) writeoff at Rio Tinto Ltd. – which, just in case you forgot, comes on top of an $8.9-billion charge last year.

All of those write offs followed acquisitions.

But this doesn't solely plague miners. We all know the problems with the U.S. banks (just look at the writedowns at Citi again today). Now even the most ardent supporter for 'bigger is better,' Sandy Weill, admits he was wrong.

We can only hope that the growing cast of fired CEOs puts enough fear in management teams to remain prudent in the future. But the truth is, it's a hard task, and CEOs aren't solely to blame.

Rag on them all you want, but if management teams sit idly while their peers bulk up, the investor community often lights a fire under them. Plus, it takes some brass to feel confident enough in your conviction that the explosive growth you see all around you is just a phase, knowing that it make take a year, or years, for your rivals, to realize they acted foolishly.

But sometimes it isn't that hard. Just look at Kinross. When its acquisition of Red Back Mining was first announced, there were numerous alarm bells, including a very unfavourable report from Institutional Shareholder Services. Yet Tye Burt told everyone to trust him.

The same goes for Rio Tinto. When it bought Riversdale Mining for its Mozambique assets, people scratched their heads as they tried to figure out how Rio Tinto could make it work. That deal was worth $4-billion (U.S.). Of the $14-billion written off Thursday, $3-billion of it came from Mozambique, three-quarters of the initial deal value.

Come on CEOs. You're smarter than that.

(Tim Kiladze is a Globe and Mail Capital Markets Reporter.)