what my intuition tells me now: hubris sucks, pt. 2Posted by Jason Apollo Voss on Nov 11, 2008 in Best of the Blog, Blog | 12 comments
So I realized early this morning (5:30 here in the forgotten time zone) that I neglected to fully empower each of you with actionable information yesterday. I rambled on about hubris without giving you the full tools necessary to ferret it out at a prospective or current business.
Yes, it’s true that I defined the difference between “swagger” and “hubris,” but I got a little caught up in my ramble and did not tell you how you can have access to the behavior and words of the management teams of your investments. The place to go is to the company’s website and to then subscribe to their conference call alerts. You can listen to almost any company’s conference call either live or in replay. Let me use AIG, yesterday’s dog, as an explicit example (and no, I don’t mean that there will be more cussing)…
Note: I am including all of the missteps to finding this information so that you can see how a wee bit of perseverance will pay off in finding this stuff for almost any company:
- I fired up www.aig.com as a first stab…that URL re-directed me to http://www.aig.com/Home-Page_20_17804.html
- Now we want to look for the Company’s “Investor Relations” section of the website. That can be found approximately 2/3 of the way down from the top and 1/3 of the way in from the left. They have a little tab there that they have created entitled: “Investor Relations”
- Click on the link. OK, now I realize that it is not a link, because the actual pertinent information is already displayed. (see even us wily veterans have to work at this sometimes)
- So below the tabs that are splayed out, “Investor Relations,” “Latest News,” and “Corporate Information” there are 4 bulleted pieces of information and they are:
Annual Reports and Proxy Statements
Stock Quote and Chart
My intuition is telling me that we want to click on the link for “Financial Reports,” so I do.
- That click takes opens a new browser window and takes us to: http://ir.aigcorporate.com/phoenix.zhtml?c=76115&p=irol-financialreports. Now we are looking for anything that says something like “conference calls” or “webcasts” or “analyst calls” or “quarterly conference call” or ?. Indeed, there is a “Webcasts” link which is the second to last item on the list of things on the left, right above “Request Publications”
- Click on “Webcasts.” That little action takes us to http://ir.aigcorporate.com/phoenix.zhtml?c=76115&p=irol-audioarchives. On this page we are told, “Welcome to the Internet Broadcasts of American International Group, Inc.” The next place to give you attention to is the place where it says, “Note: A replay of the webcast will be available through Wednesday, November 26, 2008.” What that means is that it is possible to listen to the call so that you can evaluate whether or not management is possessed…heh, heh…of hubris, that is.
- My spidey sense (all apologies to Marvel Entertainment and Kurt Cobain) is telling me that we need to look for the link that will take us to the actual conference call page. Et voila! If you scroll to the bottom of the page you will see a link that says, “Proceed to Webcast” Click on that sucker. This directs us to the succint URL of: http://phx.corporate-ir.net/phoenix.zhtml?c=76115&p=IROL-Guestbook&UniqueId=2017438&mp=irol-eventDetails&mpdp=EventId~2017438!WebCastId~814906!StreamId~1219622&pp=IROL-EnhancedWebCast&ppdp=EventId~2017438!WebCastId~814906!StreamId~1219622&pph=540&ppw=788&rdu=http*^^www.aigwebcast.com&rdt=&upv=2
- As you can see (because you are following along aren’t you) this brings up a “Registration” page that requires you to provide your 411 before they will let you listen in. All of this is straightforward until you get to the “Company*” field. Just put, “n/a” and that should do it for you. Then click on the submission button at the bottom and that should take you right to the call.
- Damn, that didn’t work, it took me to a page that says, “If the webcast player has not launched within 5 seconds, please click here.” Well it hasn’t launched, so I click. That opens up an entirely new browser window that looks like an actual web media player. Push the play button – which looks points to the right, sorta like: >
- That should get you going.
Now aren’t you glad that I left in the mistakes? The key is to not get intimidated by the process and to know that these are publicly traded businesses. That means that their proceedings are supposed to be open to the public and especially to shareholders. Now aren’t you glad you follow the blog?
- Now it is your turn to choose a company that you invest in and listen to one of their conference calls. The procedure should be somewhat similar to what I described above. Is management possessed of hubris?
By the way, the typical structure for a conference call is that there are three major sections:
- A “Safe Harbor” statement will be read. This is done courtesy of Congress and the lawyers that toe the line for the Company.
- Management’s prepar…zzzzz….zzzzz….erhem…management’s prepared remarks. You can recognize this section because they will read verbatim from a script and you will be hard pressed to pay attention. But please do. This is the section that usually composes the business’s press release and that gets reported on the major news wires.
- Q&A. Ahhhh, the best part of the call. Here is where you can really evaluate management because you can see how they interact with Wall Street’s analysts (who are almost human). This section is usually dominated by the “sell side” of the business – but more on this another time.
Interestingly enough, one of the ways that you could identify AIG’s hubris is that they were one of the extraordinarily rare firms that never used to host a conference call for analysts!!! Not only that, but once they did start hosting them, for a time they did not have a Q&A section. Not only that, but for awhile the Q&A section was literally like 15 minutes long!!! Maurice “Hank” Greenberg was not a very nice guy folks.
I hope that this posting was useful. Yesterday I made some posts on other Blogs to drive traffic here. Hopefully that will result in a more lively discussion here on some of these topics. Please, please feel free to ask me questions. The one question that I will not answer is “What should I be buying now.” Just about anything else is in-bounds, however.
I sincerely hope that each of you has a wonderful day!