I always follow LT trends of all companies I own shares in. This means I go back as far as 20 years. Many would think that is too long a time frame, but I am fine with it. The hardest thing to change in any company is the culture. Usually culture has long lasting effects that are very seldom changed.
In my opinion, investors often focus too much on the short term. I find when I “step back” and look at the big picture there is so much more that can be seen. By integrating that information with the events that were occurring during various time periods, you can gain a good understanding of the ability of the organization to perform favorably.
Furthermore, I find that focusing on the major trends of financial statements, customer views and experiences and other vantages always provide a much better picture of the organization than listening to staid conference calls. Managements are seldom candid and unbiased as to the performance of their businesses. Ask any person if they are above, average or below intelligence, most will say above. That goes for management’s perception of their performance. “How do you think you did this quarter?” The answer is almost always “above the crowd”.
Two of the earnings releases I recently reviewed really caught my eye as to how different they are. Apple’s statements were short, clear and unobstructed. The progress they were making stood out. Their clarity and simplicity was a great reflection of their culture which we all see in the products they produce. On the other hand, Pfiser earning’s release was a whooping 48 pages long. They used the word “adjust” 147 times and the footnotes were voluminous.
Now granted Apple and Pfiser are in very different businesses and sometimes more information is better than less. But, it always brings to my mind the statement by W.C. Fields, “If you can't dazzle them with brilliance, baffle them with bullshit.” Maybe it’s the case and maybe not. Anyway for me, I’m glad I sold Pfiser a few weeks back and I still own Apple.
