“CFO of the company has resigned”
“Management has committed to make the newly acquired business profitable in the next 3 years”
“Company is not sounding confident for rest of the year”
Above are examples of some announcements/ news items that we come across on a regular basis. Most of the times we take them at face value, listen to some media/ analysts and take a buy/ sell decision.
Over the years, I have realised that this never helps. None of the above example statements standalone make much sense !
Let’s take them one by one –
- CFO has resigned – immediate reaction is either it’s a non event or negative. Let’s now add some possibilities around this –
- What if the CFO resignation has come at the back of excellent recent financial results? – raises significant concerns on the reported numbers
- What if CFO resignation follows some other senior employee exits in the recent times? – is everyone leaving the sinking ship
- What if CFO has resigned after a new CEO got recently appointed? – maybe an overhaul under the new CEO
- Prediction to turn profitable – immediate reaction is positive. Let’s now add another possibility to this –
- What if the management made the same promise about another business that it acquired 5 years back and that business still continues to make losses? Why should I rely on management’s promise this time.
- Doubtful performance in rest of the year – immediate reaction is negative. Now consider this –
- What if the management has the habit of sounding caution and it mostly outperforms it’s predictions? A high possibility that may be happening even now.
You maybe agreeing with the above but then wondering what am I trying to highlight.
Isn’t analysis of any of the above events would take care of the above?
Rarely… because most of the times we don’t look into an event thoroughly. Reasons –
- There is just too much of information that floats around and it becomes increasingly difficult to identify and focus on the important ones;
- Lot of our opinions are normally formed based on what management wants us to know rather than what we should know (related article);
- Inadvertently, we end up focusing more on the present and future and rarely give adequate weightage to the past. Fact remains that track records matter – character of a management rarely changes; and
- Every information starts making more sense when related with the underlying sentiments around the company
So what is Information Tracker and how is it going to help solve this?
Have a look at some company pages and checkout the trends that are emerging –
- Bharti Airtel – easing competitive pressures, better financial prospects and reduced liabilities
- Reliance Industries – consolidation in telecom, expansion in oil, gas and chemicals, build up in renewables
- Raymond – change is evident
If you will look carefully, the above will start making more and more sense.
As it’s a start, information on many companies for now is limited. However, with build up of information, clear trend would start emerging on various counts –
- Corporate Governance
- Delivery against promises
- Financial position, performance and discipline
- Product/ service quality
- Key litigations
- Relationships with various stakeholders
- Future prospects etc
And these are finally what required to take a calculated investment decision !
What kind of information is the tracker capturing to generate the above trends?
Initially inves4 is categorising information across more than 15 categories. Some of these categories are –
- Key decisions, promises/ predictions by the management – let’s make them accountable for what they do or promise
- Key Regulatory/ legal events – some companies have a habit of getting themselves into these kind of troubles
- Mergers, acquisitions, restructuring – some are always merging, demerging something or the other.
- Key employees hirings/ resignations, employee feedback – employees are considered valuable or easily replaceable
- Customer feedback – customer is the king
- Analysts views – not everyone has knowledge about everything. Diverse views matter to take a more informed own decision.
Detailed categories can be seen on the Information Tracker Home Page.
As we move forward, additional categories can be created as needed.
Isn’t this more like a categorised news portal?
No – because
- It only focuses on the most critical events and to that extent is a lot cleaner as well as useful;
- Neither it’s sponsored by anyone nor is there any intention behind why any information is presented;
- Every information is presented in the most simplified format. Checkout any link on the Information Tracker page;
- Idea is to generate this information democratically. Everyone is invited to share the information that they believe would be useful to create a track of any Company.
- Once an information is recorded, it’s only the start. Everyone is invited to comment and improvise the presented information.
Won’t the information generator bringing in his personal bias?
We are trying to control this by thorough check before making the information public. Further, the increased engagement should further screen this out.
We would be very strict in removing any biased, bad and abusive content from the portal.
It seems good but would it be really helpful?
Believe me, it is.
Actually the idea of this came from my own personal experience. Over years, I had the habit of creating a repository of important information related to the Companies I track. I used to bookmark information, write my own analysis of the key events and search for others’ opinions.
However, as you would have guessed, the process was not efficient and very cumbersome. But at the same time it was extremely useful. Some of my best investment decisions came through this process.
Information Tracker is nothing but the digital footprint of the same process and the beauty is technology has made it super simple.
I believe what has been helpful to me should be helpful to the others.
Ok, give me some links to explore
Checkout these –
- inves4 Home Page – the middle section titled Important Information/ Analysis – this is where you will get quick access to the new additions.
- Information Tracker Homepage – to get access to all the information. This link is present in the top bar through the entire website.
- Company Directory – to get access to the company wise important information. This link is also present in the top bar through the entire website.
Play and explore and I am sure you will find the proposition very helpful.
I look forward to your comments, new information submissions and feedback.