CEO and Investor

“Skepticism is the chastity of the intellect, and it is shameful to surrender it too soon or to the first comer” George Santayana

As we get deeper into earnings season, company management are busy with analyst calls and investor roadshows.  Just like politicians, experienced management teams have become very adept at knowing exactly what to say to please investors for another quarter.  The result often feels like a very sanitized and pre-packaged version of the truth.  An experienced investor needs to understand when the wool is being pulled over their eyes – and to dig a little deeper.

After years of taking management meetings, you begin to recognize the tell-tale signs of something that’s slightly off.  Below I take a look at some of my favorite set phrases from CEOs – and the real meaning that often lies behind them.

What Management Say What They Mean
There were some timing issues around the quarter end We weren’t able to rush the sale through before the quarter end
   
We take a long term view I’m already wondering if we’ll make next quarter’s numbers
   
On an adjusted basis, we came in ahead of our guidance I moved some stuff around so that we came in ahead of our guidance
   
We are in a very price-sensitive environment Despite massive discounts, customers still aren’t buying
   
We “reinvested” our cost savings into price Prices fell so we had to cut costs as a result
   
While we feel there is no substance to the class action, we conservatively provisioned for it. The auditor forced my hand
   
The customer is becoming much more sophisticated and demanding They’re not buying any more of our crap product
   
I’m committed to this company long-term My options don’t vest until 2017
   
We are lapping some tough comparisons Nobody is buying any more of our crap product
   
Our balance sheet has never been stronger We’re about to go bankrupt
   
There was a mix issue that impacted margins I have no idea why margins moved by 20bp, so stop asking
   
We are expanding our footprint into Kazakhstan, where the market for x is very underserved How you like me now…?
   
Great question… Why did you have to ask that…?
   
We have a first mover advantage Our competitors are waiting to see if we fail before following us into this market
   
We are number one in the Russian market Because everybody else gave up and went home
   
Conversations with our largest shareholders suggest they support our strategy Nobody supports our strategy
   
We expect this acquisition will be accretive to EPS in year 3 You will have forgotten this acquisition in year 3
   
This deal has strategic importance This deal doesn’t make any sense however you look at it
   
We are pioneers in the field of “big data” I just heard about “big data” and I’m hoping to add a P/E point to our share price
   
It’s been a challenging year I just want my options to vest
   
I’m confident we will make our guidance I’ve never been more scared in my life
   
I look forward to seeing you again next quarter I wish you would all die

Join the conversation! 5 Comments

  1. Great post, really funny! (Damn, I wish I’d written that 🙂 )

    Liked by 1 person

    Reply
  2. nice one Tom

    another way to interpret ‘great question’ is ‘amazing….our IR have prepped us for this question extensively and here’s my slick answer….’

    Liked by 1 person

    Reply
  3. Thanks Paul! Haha..yes great question = I have a great answer!

    Like

    Reply
  4. […] Beevers over at Stockviews [1], who’s more entertaining than us, and more cynical, has compiled a handy list of things CEOs […]

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