It’s surprising to note that most analysts and financial media, don’t go back in time to tick back on what the company CEO said a few quarters back. They just take the earnings call at face value, and worse, a number of them don’t even analyse it against what they wrote four quarters back. And we beleive them, we buy and sell based on that. Don’t pat yourself on your back, for not following the folly. Even if you don’t, your fund manager does, and you depend on them to deliver your pension.
Cloud contracts are a famous example; there are lesser and lesser of those five or ten year contracts coming through, nowadays. But the cost of executing their contract keeps accumulating today for a contract signed in 2020, at the height of the pandemic. What did they tell us back then? Cost of compute, or whatever it was called, was going down, but they were smart to get customers locked in, for five years. They quietly stopped talking about it afterwards, if you see.
I am not saying every company does that, but it is not illegal to do so. Your fiduciaries don’t care to look back, at the earnings call from four quarters back. You can, but can you?
You have a binary choice. Either continue to leave things as is, or start looking at how your investments are doing.
