Stock-market people, stop troubling real people

An irreverent take on a tragicomic quarterly ritual

Here’s how I picture a CEO’s life. 89 happy days, doing real work. Every 90th day, ditches laptop bag for chainmail, helmet, spiky metal ball attached to chain, steely look and steps into gladiatorial circus more commonly known as earnings concall. Here are a few recurring motifs from that quarterly ritual:

·You-do-my-job: I’ll grill you on guidance till all cells in my model are filled.

·Snarky: Thank you for not disappointing us again.

·Unknowable: Price outlook on yarn, ferrochrome, TiO2, oil derivatives, …

·Words-in-your-mouth: “No guidance. We aim for industry+”. “So, 15% doable?”

·Noise-for-signal: Gross margin up 30 bps but EBITDA down 40bps. Why?

·Anecdotal extremist: I heard your product quality’s bad. How are you fixing it?

·Anal: Volume vs price growth, by segment (Mix usually gets short shrift. I’ve never figured how algebra of cross products across 100s of SKUs gets reduced to two numbers).

·Live updates: How’s January going? First week of Feb?

·Show-off: Having followed you for years, I think <15-min soliloquy> I don’t have a question.

·Vision’s nice, but: Billion-$ aspiration is for FY26 or FY27? Can we expect 16% EBITDA then?

·Right question, wrong person: Why is auto company in insurance? “Above my pay grade”.

·Uncontrollable: What part of cost-cut will be retained? (Wise CEO: “Market decides, I don’t”)

·Egocentric: I joined late. Could you repeat everything you said.

·A-hole: When are promoters planning to sell out entirely (true story).

·Otherworldly: Sequential, qoq, CQGR (Earth goes around Sun quarterly just for IT analysts).

·Presumptuous: I suggest that you move your corporate HQ by 3000km (true story).

·One-tight-slap worthy: Doubling in five years isn’t enough. How about more M&A?

I don’t know what management does right after a call ends, but I’m guessing it involves a bottle of tequila and a punching bag. Maybe an inevitable Zoom faux pas will let us know.

Why unload pet peeves now? A year ago, I asked stock-market people to not trouble business managers during abnormal times. Hyperventilating amidst covid-lockdown was distracting to management and dangerous to investors. This applies in normal times too, even if to a lesser extent. On a quarterly basis, we can at best infer that business is unsteadily progressing in the expected direction. Ultra detailed con-call questions boost false confidence rather than real understanding. Even assuming impossibly perfect answers, I doubt if they lead to better predictions of business or stock-price outcomes. And there’s serious risk of stock-market people’s short-termism rubbing off on real people.

(Current rant done, here’s my rant from last March with the same title)


Stock-market people, stop troubling real people

There are a plethora of well-meaning analysts and over-anxious investors organizing hundreds of calls with management of businesses to get a better sense of what the hell is going on. In one word, STOP. In two, please don’t. In its long form, it’s pointless and counterproductive to the point of being harmful.

First, in unprecedentedly troubled times, let management be 100% focused on what really matters. People & safety. Let them concentrate on employees, consumers, distributors, retailers, suppliers and all of their families. There's enormous confusion and stress on serious matters of health and livelihood. Don’t add the burden of live commentary and match prognosis to an uphill chase.

Second, if they do what’s right, stock-market people will (eventually) be better off. This is true at all times. Irrespective of what we think of ourselves, we’re an indirect constituency not a direct one. Companies do right by us through doing right by their customers, employers and business partners. This is even more true in stressed times. Just let businesses take care of real people and they’ll eventually come back doubly satisfied with the business for taking care of them.

Third, no one knows sh*t. There’s no precedent or playbook to what’s happening now. People don’t know how to handle it, how it will pan out in the near-term and what longer-term consequences will be. Since management are usually polite, their reply to questions on such lines are unlikely to involve telling the questioner to buzz off. However, beyond some live commentary on the present, any assessment is simply an uninformed guess. We’re better off not hearing it than hearing it.

Fourth, they’re not responsible for us being in the red. Even in ordinary times, stock price movements in the short term have NOTHING to do with business fundamentals. In current times, this connection is absolute zero. Some self-quarantined dude in Connecticut or someplace is sloshing money around the world, making stock prices fall. Trying to make misinformed guesses on which businesses are handling the next few weeks better or on whose EPS is less impacted will not in any way affect our fifty shades of red.

Here’s my request to people like me: please let businesses be, for an indefinite period of time till things settle down. Let them be solely focused on real people and real issues. As things calm down, companies will communicate with us on what transpired, what they did and what future consequences could be. The last part will still be a guess, though.

We’re a fairly self-absorbed bunch overestimating the importance of ourselves and squiggly lines in our world. Notwithstanding falling stock prices, everyone may be better off if we quarantine ourselves from management. Let firefighters do what they’re supposed to do, without thrusting mikes at their faces.

(Originally published at