Thursday, April 17, 1997
Cold Calling
Buzzards
by
Phred5252
Pick up any of the trendy business magazines and you will undoubtedly find an article that touts the advantages of having a home office. One of the "perks" they neglect to mention is the fact that, since you are frequently home during the day, you are subject to the attacks of the cold-calling buzzards.
I maintain a separate business line and generally let the answering machine handle the home line. Sometimes there is a break in the action, however, and I answer and expose myself to a buzzard. Since I work in sales and make frequent use of the phone, I sometimes enjoy being on the other end for a change. It's interesting hearing how someone else works. Some are very good but most are very poor at what they do. They have never made me feel as though they understood my needs and had my best interests at heart, something which I strive to do. Resisting their pitch had more to do with the psychology of the interaction rather than my knowledge of picking stocks. After all, what did I know? They are the experts, aren't they?
Enter the Fool. My life took a quantum leap the day that I discovered the Motley Fool online. It wasn't that long ago, and I never thought that I would be in a position where I would want to write about one of my experiences.
What I enjoy the most is that the point is for everyone to learn something. The industry seems to want to keep everyone in the dark and to rely on the opinion of the experts. The Fool simplifies matters and makes me want to learn more.
In the past, the buzzards had a relatively clean shot at me because I didn't know how to value stocks. When they failed in their attempts, it was more because of their poor techniques. I have the Fool to thank for changing that.
I frequently visit online and have read The Motley Fool Investment Guide and am developing an understanding for this field. I recently received a call from a buzzard and he was rambling on about the stock of a company that is in a business that I could not understand. I told him that I didn't invest in companies when I couldn't understand what their product was about. He then changed gears and asked me about a business that I do know a little about. Yes, I am familiar with the product, I understand it and I do visit their locations and find it to be a pleasant experience. Would I be interested? "It's worth looking into," I said.
"This stock is poised to increase in value by at least 25% in the next year," he said.
"Why?," I asked, as I thought about his use of the word "poised" and wondered about his crystal ball.
"The company is embarking on a new strategy and will be entering a new market whose growth is unlimited." (I am always leery of new strategies and have yet to find where growth is unlimited.)
I asked him if he had a copy of the most recent annual report, 10K and 10Q. He said that he had the information right in front of him. "Tell me about there earnings growth rate for the past year," I asked. He said that he had no idea but was confident that it was going up. Why else would their analysts be recommending it?
Next, I asked about the growth in total revenues and received the same answer. He did know that the current EPS had met earnings estimates but didn't know about prior performance. He also had no idea about any changes in the number of outstanding shares in the past 3 years. I asked him to fax me the reports that he had in front of him as I wanted to review them and we could talk about them later. He said that he would.
Three days later, I was faxed a copy of a five-page report that was generated internally at his company. It contained some very interesting information: management's strategy for future growth and how it is testing the new market. However, a discussion of the most recent financials which started on the bottom of page two and page three was missing.
I went back online and downloaded the most recent stock report, financial reports and earnings estimates. Unfortunately, the data is not that recent and I will have to wait for newer reports to come out.
I haven't completed my spreadsheets as yet and am not really confident that the new strategy is going to work. They dominate one market and are entering a market that is dominated by two competitors. Do I think he was leading me in the wrong direction? I don't know. But I will continue to watch the company's performance, both online and as I frequent their locations.
What I do think is that he didn't understand what he was talking about and didn't take the time to understand my goals and convey a value statement to me. Why should I even be listening to him? I know what he is going to do for himself, but what is he going to do for me?
My experience with the Motley Fool has convinced me that I can do more for myself than any buzzard. I thank you for that.
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