“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.
Sound familiar?
|
What Management Say |
What They Mean |
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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…? |
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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 |
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