We are Always looking
Conference Call Ratings
Good calls make great buys possible.
When you can’t understand what your company is saying, you’re screwed.
Which companies help.
Which companies hide.
StockJaw’s new “CCR’s” provide any readers with a single rating for earnings conference calls. Are calls easy to follow(4 Stars), or a morass of info meant to mislead(1 Star)? Many calls can be difficult to understand, or less then fully forthcoming. Industry jargon and acronyms abound. Some simply tell it like it is–Netflix is the best. Amazon is aloof and often mute. Our rating system is 1-4 Stars, with 4 being the easiest to understand, 1 being nearly opaque. Some companies are inherently hard or even impossible to understand, thus uninvestable. Master Limited Partnerships(MLP’s) and Morgan Stanley are the worst.
StockJaw believes it is necessary to understand the businesses within which your chosen companies operate. Investors want companies that are shareholder friendly. If management doesn’t take its’ earnings calls seriously, they don’t take their shareholder base seriously. If you can’t or don’t understand the business, you don’t know your holdings. Kaboom. That’s why we rate them.
“Crooked Hours Report.”
T h e entire strategy of investing is to be there when it’s good, and be gone before it’s not. That means identifying potential threats in advance. Long-term investing calls for long-term looking. Companies operate according to business models, and planned growth paths. Cracks eventually appear in every model or plan, even for our very best businesses and companies. The “Crooked Hours Report” has arrived. When cracks form in otherwise bullet-proof business models/growth paths, such paths become crooked, and harder to achieve.
Solely watching for problems within your companies is not enough. Anticipation of problems is key. Our report is designed as a bullet-point list of exactly what to watch, and look for. Quickly learning and acting upon formative events, prior to price moves, is what investing is all about. That’s why StockJaw now launches our
“Crooked Hours Report.”
The MACRO Picture
Crooked Hours Report–Macro.
I n our opinion government intervention remains the single largest threat to the majority of our portfolio–Amazon, Facebook, Alphabet, and Alibaba. The Economist(Nov. 4, ’17) reports that between 1970-1999, U.S. anti-trust regulators averaged 16 lawsuits per year. Between 2000-2014 their average dropped to 3, a greater that 80% reduction.
Any legislative attempt to regulate these uber-powerful companies will likely result from an event raising congressional “concern,” followed by public outcry. For example, the streaming of a murder on FB Live resulted in palpable public concern and a flurry of sensational news accounts. Everyone witnessed the upset. Yet FB Live also provided clear and damning footage of a police shooting many yet feel was criminal. As of now, people find far more benefit than concern. That’s good, and we think a more stable and lasting view. But things change. Attitudes shift. When the public begins to view these four companies as a threat–which they will–regulation won’t be far behind.
However, any legislative attempt to regulate AMZN, FB, or GOOGL/GOOG, could prove very difficult. Can you imagine the legal teams any of these companies would build? Think U.S. vs. Microsoft. When the U.S. attorney threatened legal action, Microsoft’s unspoken response was “bite me,” and Bill Gates meant it. MSFT proceeded to fight the entire federal government to an embarrassing frustrating draw. Fed prosecutors hate losing more than doing nothing.
Donald Trump routinely speaks with a pro-business tone. Nonetheless, he has already clashed personally over Twitter with Jeff Bezos–AMZN, referring to the company as a monopoly. Bezos did not reply diplomatically, and humiliation is never a solid strategy. Similar statements have been directed at Facebook, in particular focusing on the streaming of homicide on FB Live, Russian election interference via FB, the general rise of fake news, and the “echo chamber” effect on public perception. Many call it a “utility,” along with Google search.
If people start doing this over FB, Alphabet, or AMZN, regulation can’t be far away.
The senate has already cooked a legislative intervention they call the “Honest Ads Act.” On November 1,’17 top executives from Alphabet, Facebook, and Twitter testified before members of the U.S. Senate. These high-profile hearings focused on Russian use of these three platforms to interfere in U.S. elections. “This is the national security challenge of the 21st. Century” commented Lindsey Graham(R-South Carolina.) Federal prosecutors are like lions. They test the water by targeting the slow and weak first. That means Twitter.
Wins in big cases launch political careers. Think Rudy Guiliani–fed prosecutor and multi-term NYC mayor. Amazon, Alphabet, and Facebook, sit in the government’s cross-hairs on a daily basis, as obvious targets but hyper-dangerous to attack. Depending on what these companies do, that balance could shift at any time.
Alphabet’s current anti-trust concerns lie in Europe. The EU has already sued and fined Alphabet $2.6b. They have also sued Apple for $15b. Alibaba operates solely at the whim of the PRC and it’s shifting political directives. All of the above rank as leading concerns to the ongoing success of these four massive companies, and thus our stake in each.
“Where’re the headphones?
Thanks for reading. Keep looking.
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