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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Shane M who wrote (52566)	10/21/2013 8:18:37 PM
From: Elroy	1 Recommendation Recommended By Jurgis Bekepuris Respond to of 78774

"if management consists of slick presenters who try to oversell (fool?) investors about the true state of the company - then does that mean anything to you? Or do you just have to expect that management is going to put overly optimistic spin? That they have to say it like they mean it - even if they don't" Management will almost always have a rosier outlook than they should, it's natural. They are leading their organization, and no one gets to that level with the attitude "We're #6, and heading next year to become #8!". It doesn't mean they know something bad is coming and they are trying to mislead you, it is just a natural role for most CEOs to cheerlead for their organization and expect its plans (which they probably created) to be fruitful. A CEO can't lead a company and also say "We have three major new product launches next year, they all look like crap to me!" So I wouldn't interpret a slick upbeat presentation as necessarily intentionally misleading investors, it's natural. My point is that management's "positive spin" is better off ignored and you should focus on other sutff - numbers, financials, your understanding of the company's position in it's industry, etc. Plenty of times management will give very positive presentations, then two months later they'll announce negative news which craters the shares. Then they'll get that bad news behind them and begin making positive presentations again, this is just the way the presentation game works. My point was just that the "feelings" I got from presentations weren't generally useful. Meeting with management can be useful because you can ask them your areas of concern and see their solutions, and also whether your concerns are even on their radar. But even that may have limited value. You have concerns, but the thing that moves the stock over the next 1-2 years may be something good/bad that never even occurred to you.

To: Shane M who wrote (52566)	10/21/2013 9:34:40 PM
From: Spekulatius	1 Recommendation Recommended By Sergio H Respond to of 78774

The main benefit if CC (i use the one at seekingalpha - i almost never listen to them) is that it gives you a better feel how management looks at the business and what metrics are important to them. Sometimes, I find interesting tidbits of information that can solidify or weaken my investment thesis. Examples are the HES CC that i commented upon in this thread. HES sure had their difficulties but based on the info they have given and comparing this to information provided by other companies, i knew that they hit pay dirt in a big way in Bakken, even though the financial numbers did not look great. I also understood a little better that reserve growth was lacking even though they had large investment, because they were developing the infrastructure themselves and that had to come first, and the proved reserves were likely to follow. A negative example, where I think problems may run fairly deep, is IBM. As i read about Rometty and what she states in CC, it appears that her single minded incentive and goal is to reach the 20$/share earnings goal. I think looking at a single number is dangerous and for that reason, I am not inclined to invest in IBM. I'd rather try my luck with ORCL, which has similar issues (lack of topline growth) but is there management is much more product and customer focused then trying to fabricate a number with financial engineering. So in my opinion, CC help me understand the business and management viewpoints and that alone makes it worth going through them.