The Smattering Podcast 65: Earnings Season Mindset​

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[00:00:00] Jason Hall: Hey everybody, welcome back to The Smattering where we ask the hard questions about investing. We are one year and one episode into this amazingly fun venture. I'm Jason Hall, joined as usual by the voice of the people, Jeff Santoro. Jeff, buddy, how's it going, man?

[00:00:18] Jason Hall: Hey, hey, how are you, friend?

[00:00:20] Jason Hall: I'm good. We're getting back to a little bit more of like the tool, kind of a toolbox episode here. We've been on a run where, we kind of a little self introspection last week, a little celebration, a little looking forward with our one year anniversary episode. We've had a lot of guests on over the past, really over the whole summer, I guess is the best way to think about it.

[00:00:40] Jason Hall: And here we are in the middle of earning season you and I both for, for my day job, for your side hustle, we, we do a lot of professional work looking at earnings because people want to know what's going on with the companies they own. Traders always love to trade around earnings 'cause stocks are more volatile. So we decided to do an episode, we're titling it, Earnings Season Mindset.

[00:01:02] Jeff Santoro: Yeah, this is, I thought this would be a good idea based on what I decided to write about last week in our newsletter, which was just about specifically about when companies in your portfolio have huge one day drops after earnings. People can go back and read that specific short Newsletter thing that I wrote about it and I'm sure we'll talk about it.

[00:01:21] Jason Hall: You don't subscribe to our newsletter, just go to TheSmattering.Net and it'll take you right to it and you can subscribe and get it in your email. Every Sunday we drop a new, we share a little bit of our thoughts and then on Saturdays corresponding with the release of the podcast we do the transcript too. So if that'll help you to have a transcript that's how you get that to go ahead, Jeff.

[00:01:39] Jeff Santoro: Yeah, I will talk more about it there. But that's what spurred the idea on. But I I'd love to talk about this because I love earnings season. I think it's super fun. I like getting all the info, all the new numbers for my nerdy spreadsheets.

[00:01:52] Jeff Santoro: So I thought it'd be a good thing for us to just kick around for a little bit and have a conversation about. Before we dive in though we have been continuing to get, slowly, people rating and reviewing the show on the podcast apps. We appreciate that. If you're listening and haven't had a chance to do that yet, It just takes a few seconds to give us a star rating. It takes a few more than that if you want to write something about the show.

[00:02:13] Jeff Santoro: And also feel free to reach out for feedback. We, we occasionally hear from listeners on email or Twitter DM sharing their feedback about the show, positive and negative. Anything you have to say, please let us know. It helps us make the show better.

[00:02:27] Jeff Santoro: All right. So Jason, let's dig in. It is earning season and you're right, professionally for what you do during the day and my side hustle, this is an exciting time every quarter because there's new information, new angles to write about and think about.

[00:02:42] Jeff Santoro: But it also can be very anxiety inducing when you see large reactions to earnings, whether they're positive, well, I guess the positive may not be anxiety inducing as much as when they're negative. And it got me thinking about just the mindset that you need going through earning season.

[00:03:01] Jeff Santoro: And I know when I was , I'll start off with a quick story. When I was very new to buying stocks, I would do dumb things like on the day a company was going to report based on really nothing more than my feels, I would buy a company because I thought it was going to go up when the earnings came out. And I think the first time I did it it worked like I bought something and then earnings came out and it jumped like 10% and I thought I was a genius.

[00:03:27] Jason Hall: You mistaked your luck for skill.

[00:03:29] Jeff Santoro: Yeah, and then I did it again and then something dropped 10 or 15%. And then I stopped. I was like, okay, this is stupid.

[00:03:35] Jeff Santoro: But that's, maybe one of the things we can talk about later is like, should you or could you or does anyone ever buy like in earning season, like the day of the day before, that can be... sometimes you see volatility with the stock, even leading up to earnings, I guess the market is doing the same thing I was doing back in the day.

[00:03:52] Jeff Santoro: So I guess to kick things off, let's each talk about what we do, if anything, during earning season.

[00:04:00] Jason Hall: Yeah. So I love this because you and I take entirely different approaches to earnings season and mine's evolved a tremendous amount. I think I've probably told this story here on the podcast. I've, I've certainly written about it and told, talked about it in other formats, but I guess it was, I can't remember exactly when, but pretty early in my investing career.

[00:04:25] Jason Hall: My wife and I and my cousin and his now wife, the four of us spent 17 days in Europe. Great trip. We went in the spring and it was at the tail end of earnings season for the first quarter when we went. And it was just long enough ago that the internet was not quite as ubiquitous as it is now. Fintwit certainly wasn't a thing. Social media for, for finding information, you would actually have to like go into like a McDonald's or something to get wifi to get internet because it was still expensive back then to have data internationally.

[00:05:07] Jason Hall: And like, I mean, I almost ruined my marriage for a couple of days there because like, I was so, like I wanted to know what was going on and like, like I set up stop losses and one of my, like I did, I did all this stupid stuff and it was a good lesson to learn when my wife said, you have two choices and you may think that neither of them are good choices. But one of them is more important that you make the right choice.

[00:05:40] Jason Hall: And I chose correctly and decided just to stop worrying about it and stop focusing on it. And had a great vacation and strengthened my, strengthened my relationship with my spouse instead of damaging it.

[00:05:53] Jason Hall: And Jeff oh, goodness, I've forgotten his name, but wrote the author of one up on Wall Street, Peter Lynch, Peter Lynch. He writes about it in that book when he was, I think he was golfing in Scotland or something during the crash, the flash crash in 1987 when the market fell 20 some odd percent like a single day and he's managing other people's money. Substantial amount of other people's money. And back then again, no internet, paper orders, actual traders on a floor, right? It was a very different environment and talking about, like, for most people, the best position to be in was to do nothing. And again, that wasn't during earnings season when that happened, but it was during a period of extreme volatility.

[00:06:39] Jason Hall: And all of that to say that the approach that I've evolved to, it's besides my professional obligations and the ones that I'm really curious about, like the ones we're talking about with, like in The Smattering Portfolio I might not look at a company's earnings report for weeks after they actually report.

[00:06:58] Jason Hall: Some of my big, like my biggest holding right now, my biggest holding is MercadoLibre, we were talking about it before we hit record. It's over 4% of my portfolio. I haven't read the whole earnings report yet. I haven't, I just haven't. I will. I just haven't.

[00:07:12] Jeff Santoro: Yeah. You. You drive me nuts because you're like my only investing, well not, I, I can't say only investing friend. I got in trouble with our other investing friends for saying this. You're the investing friend I probably talk to the most. And sometimes I'll text you about a company that reported and you're like, what? I don't, I don't know. And I, I know, I know, even as I write it, It's not like you're going to then go look in order to engage in the conversation. You will just ignore me.

[00:07:39] Jason Hall: Of course not. So yeah, no, no, no. I won't ignore you. I will engage you in completely unproductive ways.

[00:07:45] Jeff Santoro: Well, so is it so that story you told is interesting because I think one of the lessons I learned back early on when I was talking earlier about how I used to sometimes just try to guess and buy something before earnings. One of the things I learned pretty quickly was because my thinking when I was new in wanting to be up on earnings, like right when they drop, like, okay, it's four o'clock. I get the email alert that company X reported. I'm going to go read the press release.

[00:08:13] Jeff Santoro: I used to think I need to do that because what if there's some like really bad news and I need to sell because the company is going to fall apart. And what I realized was A: that happens very, very rarely that something so catastrophic comes out in an earnings release that you'd have to sell. But I also learned that even if I open the report, read it in two seconds and could trade in another three seconds, I've already, it's already sold off 30%. Because the algorithms and the professional traders and all the stuff that's out there now, will just scrape the press release for news and it, you can't, you will never be quicker than, than the computers.

[00:08:57] Jason Hall: They react before an individual investor has a chance to even see the alert show up on their phone.

[00:09:02] Jeff Santoro: Yeah, because there's days where I'll see something down 10% and the release isn't out yet. And I'm like, okay, so yeah. So, , now. On the margins, could that matter? Like maybe you sell for a loss of down 20% and instead of down 25% or something like that, maybe.

[00:09:19] Jeff Santoro: But at that point, it's probably not gonna matter in the long run. So that's a lesson I learned early on.

[00:09:24] Jeff Santoro: I am still a huge fan of Earning season. I just think it's fun as someone who like likes this, , I said I have my nerdy spreadsheets I like to update the numbers and I like to see where things are going.

[00:09:38] Jeff Santoro: What do you think about, so let's go to my thing I wrote about last week in the newsletter, which was what happens when a company you own. Maybe even in your situation where you haven't read the report and or no one rushed and not in a rush to, but it drops 20% on the news. That happened to me last week with three or four different companies.

[00:09:58] Jeff Santoro: If 10% or more losses drops, I probably had four or five companies just last week that dropped that much based on earnings. Would you, what do you do in that situation? Does that compel you to go look at least?

[00:10:11] Jason Hall: It's funny because obviously whenever you see that you, you want to, and we've talked a lot about like the managing your, your investments is managing yourself as much as it's actually managing the assets that you own.

[00:10:23] Jason Hall: And that pain of a loss is going to hurt more than a win is going to feel good. You could double and it's going to feel good. You could lose 10% and that might hurt worse than that double feels good. Because just again, human psychology. So you do want to know.

[00:10:39] Jason Hall: So like, as a starting point, I've, I think I've, I've really made it such like a bedrock principle to understand that, like that reality of how we're wired, and how we literally feel when, when we see gains and losses. So like, I'm, I'm, I've almost overbiased myself to not react, right? To not, I shouldn't say react, but to not act, right? I guess react is probably the best way to put it.

[00:11:05] Jason Hall: But the other part of it too, is like, for a long time, like I had swung the pendulum in the other direction. Well, Fortinet is a good example. I think that was one that, that you wrote about that fell significantly, 20, 25% or so.

[00:11:19] Jason Hall: 25%. Yeah.

[00:11:20] Jason Hall: Yeah. Yeah. And this is a big company and this is a profitable business, right? This is, it's been around for 20 years. It's not a new company. It's I mean, of course it got caught up in all the zeitgeist back in 2021. But again, this is a good, productive cash cow kind of business. To fall that much was certainly a surprise. And my knee jerk reaction, I can tell you because I'm so pretty bullish in the business, you and other people that I know that follow it said, I see this as an overreaction. But there's a version of me that, I mean, as recently, probably it's 2020 or 2021, like I might've just bought before even like doing more than spending five minutes of scanning the report

[00:12:01] Jason Hall: and, and in general, like over the longterm, that's been fine. But a lot of times when a stock falls that much, it falls that much for, for a reason, right? And I think in the case of like a Fortinet, is it 25% less business than it was a week ago? No, but maybe the market's saying that, wow, we were really overestimating how quickly the company can grow over the next five years, right?

[00:12:38] Jason Hall: And so I found that for me, it's really smart just to not act and let the market kind of figure it out, you know.

[00:12:47] Jeff Santoro: I, that's the lesson I've learned too. In fact, I was so sure that the market overreacted and I still didn't, I didn't buy anything. And I didn't buy, I bought a little early this week. I bought on a Monday instead of a Wednesday cause I'm going to be busy. So I did my weekly buying this week. I did it today. We're recording this on Monday. But it wasn't Fortinet.

[00:13:06] Jeff Santoro: And that's part of the same lesson that I feel like I've learned because here's the reality. There's this is another- this is related to another thing I I learned pretty early on that I think is worth thinking about.

[00:13:16] Jeff Santoro: I don't see a lot of people think of it this way, but I didn't come up with this. I saw someone say it on Twitter once and it really resonated with me So I looked at Fortinet the 25% drop on Friday brought it back to where it was in March like mid March. So yeah, you're like Oh bummer like , it's 25% lower. That's that sucks.

[00:13:35] Jason Hall: That's not like March 2020 level deals.

[00:13:38] Jeff Santoro: So, but to me, it's more it to me it's the market saying it's probably more fairly valued at where it was in March than it is now. And we've seen a lot of companies have just we've been talking about it every time we do a portfolio update. It's been us going back and forth being like, If you told me in December of 2022, that the biggest performer in this whole portfolio would be up 15%, we would have taken it because that's how beaten down we all felt at the end of last year. And here we are talking about triple digit growth for some of the companies in the portfolio.

[00:14:12] Jeff Santoro: So looking, that's one thing I do is sort of like a mental trick is go see the last time the company traded at its now reduced price. And it sometimes it's I remember back in 2021 when something would drop big, it would sometimes it would just be like two weeks earlier, because just you forget how quickly things have gone up.

[00:14:30] Jeff Santoro: But the other thing too, that I think matters when it comes to like big drops is If you have a framework or a system or some sort of steps you follow for your buying, and I know that's more my style than yours. You're sort of like a save a bunch of cash, find an opportune time and buy a bunch of stuff. And I'm more of a regular buyer. That has helped me enormously.

[00:14:55] Jeff Santoro: I have a little bit of a system I follow each week. When I buy, it's a framework, not rules, because sometimes I ignore it and I just buy something that my little system would tell me not to, because it's just what I want to do.

[00:15:09] Jeff Santoro: But whenever there's like a big, I feel like there's a decision based on a big move, like with these three, because it was Fortinet, it was Digital Ocean, Lemonade, Redfin, like these are all companies I own that dropped pretty significantly last week. And I didn't buy any of them today. And part of it's because I forced myself back into my system as a check on trading sentiment. You know, cause one of two things will happen with these companies that dropped 20% plus, they'll slowly come back up or they'll really quickly come back up or they'll stay where they are or they'll drop a little further as time goes on.

[00:15:48] Jeff Santoro: And that will probably be, the longer you wait and see what happens it's probably a better indicator of where the stock should be, if that makes any sense,

[00:15:58] Jason Hall: I think the Redfin one's a good example because you know, this is a stock that has just gone gangbusters from the lows, I guess, late last year, and like, like I've said, and I made some pretty significant investments back then because there was a major short thesis that the company was like, they were a zero like people thought they were going to go under or be acquired for pennies on the dollar or whatever. And like, I understood the balance sheet pretty well. And like, I didn't see like existential risk for the business, but like, I was also being realistic that because I follow housing really closely. And Redfin's core business, cause now they've gotten out of like the house flipping that they're out of ibuying and they do a little bit of other stuff, but like they make almost all of their money on commissions from as a real estate brokerage, right? They list houses and they, they sell them and they make a little bit of money. Like, I think they do like a little bit of mortgage origination, that kind of stuff, I think they do. Most brokerages do a little bit of that.

[00:16:56] Jason Hall: But like, this is a terrible time to be in that business because there's no inventory, right? Nobody's listing houses. A lot of it's single family homes have been sucked up by corporate investors that are renting them. You have so many boomers that have not downsized for one reason or another. And a lot of them it's because they spent 20 years refinancing all the way down, and they still have a mortgage and it's less than 3% and they're not going to sell it, that big four bedroom family house, and then move to a condo that cost half as much and have the same mortgage payment. They're not going to do that.

[00:17:35] Jason Hall: So it's, the housing market is just kind of a mess right now. So it doesn't surprise me. It doesn't surprise me that Redfin stock's got absolutely smashed. Because investors got way out ahead of it. And again, there was pressure from shorts and shorts getting squeezed a little bit.

[00:17:54] Jason Hall: So looking beyond just what they reported and how the market reacted that day, your example about Fortinet is spot on. It's like, what did the stock do in the weeks and months heading into it? That's going to have some. Some effect

[00:18:08] Jeff Santoro: And one thing I've learned, I've actually learned this lesson from listening to the Motley Fool Money podcast, because they taught- back when Chris Hill was hosting it, especially one of the questions he would ask the guests a lot when there was a big stock movement, positive or, especially if it was negative. You know, he would say something along the lines of like, is this warranted or is this some people maybe taking some money off the table if it was like a company that's done really well. Or was this a company that was just priced per for perfection?

[00:18:35] Jeff Santoro: And I think there was a little bit of that in these companies that we talked about already to like Redfin, anything that goes up, what was it up 100 something percent year to date or something? It was a lot, for a company that, yeah, that doesn't have its future set in stone yet. That's going, any little blip, same thing with Fortinet, it's an established company, but when, when it's been doing so well, it was up like 50, 60% year to date.

[00:19:00] Jeff Santoro: And all of a sudden they're saying like, yeah, it's going to look a little tough for the next quarter or two. Well, of course it's going to sell off, like, you know, cause it had been going up so, so, so much. So that's another-

[00:19:13] Jason Hall: Just, just round figures here it was up about 250% since last November before the big, the big sell off at earnings. It's still up 150% since November.

[00:19:25] Jeff Santoro: Yeah yeah. It's in fact, I, one of the things I noticed when I looked at it. After the drop, it's still kind of expensive.

[00:19:33] Jason Hall: Yeah. I mean, if you look at it based on, like, based on where the business is today, right. That's the thing.

[00:19:39] Jeff Santoro: So what, here's another thought I had too, as I was thinking about this episode. Not all 20% drops are equal. And here's what I mean. One of the things that's just a really easy thing you can look up that will give you a little bit of a sense about how big of a deal, a huge drop or a huge jump is, is a company's beta. And also its size and how established it is.

[00:20:08] Jason Hall: So beta is just to define that for everybody. It's how volatile a stock is compared to a benchmark. For most stocks the beta is compared to the S&P 500. So how much more volatile is it than the market, right? Is I guess the way to think about it.

[00:20:20] Jeff Santoro: Yeah. So if you have a company with like a really low beta and it jumps or drops 20%, That's a little bit more of like a big deal versus Lemonade, Redfin, which I'm not looking them up right now. But I'm guessing they have betas decently above one meaning they're going to be more volatile both on the upside and the downside than the market, there's some combinations

[00:20:43] Jason Hall: Redfin's is three So, triple the volatility of the S&P.

[00:20:47] Jeff Santoro: So, you should expect, over the course of a year, probably multiple double digit drops. And I remember when I was brand new, just not even relating to earnings, I would open the yahoo finance app and see something that I own up 6% down 8% and freak out.

[00:21:06] Jeff Santoro: And then just because I did it long enough, I was like, Oh, that happens. It's like a normal, for some companies, that's like a Tuesday. They're just, they're just more volatile.

[00:21:14] Jeff Santoro: You see something really established. Like if you see Berkshire Hathaway dropped 15%, something catastrophic happened because that's probably the best example of a company that's not going to move around much.

[00:21:27] Jeff Santoro: So Jason, here's one of the things I was thinking about. One of the other things that kind of helps me keep my head straight on straight during earning season when there's big movement is making sure I'm clear on why I own all the companies in my portfolio and what are the things I'm keeping an eye on to let me know that the company is on track or not on track.

[00:21:53] Jeff Santoro: Because in the case of really all of these companies we've talked about, I looked at the results and said, basically, yes, some short term challenges. And they're very clear what they are, deceleration of growth, consumer spending less, whatever it is. But all the things that I'm keeping an eye on are, which are reasons why I'm owning these businesses. I want to see growth in users that go keep going up. I want to see revenue grow. I want to see larger customers increase all still intact. And no company goes up until the right on a straight line. There's dips and valleys along the way and there's going to be great quarters and weak quarters. But if you own something without having any clue why you own it, which I'll be honest, there are things in my portfolio I bought with no real reason other than someone recommended it to me.

[00:22:45] Jeff Santoro: And so I'm not, I'm not like on my ivory tower here. But I also know enough to also not react to their big movements because I don't know enough about the company to know if what the drivers of the big movements are .

[00:22:58] Jeff Santoro: But I think that's another important thing. Like if you know exactly, okay, I own Lemonade because I'm looking for this and this is still there. It's a good reason to just stand pat and hope it's just a one quarter blip. What do you think about that?

[00:23:11] Jason Hall: Yeah, I think Lemonade is a good example, because we did a couple of videos around earnings talking about Lemonade, like what they need to do. And so there's two parts of it, right?

[00:23:21] Jason Hall: There's why do you own it? What is your thesis? What are you expecting? What do you know about the business? What are the risks as you understand them? And like understanding the bear thesis, honestly, and I think when you're dealing with, with the volatility around earnings, I think understanding the bear thesis for a business and understanding the risks is more important than understanding like the bull thesis, like the how am I going to make money part of it.

[00:23:45] Jason Hall: Because the reality is like all it takes is one thing going wrong. Or not going to plan and the best thesis in the world gets unraveled. One thing, right? And that's the case with Lemonade, right? And the one thing happens to be really damn important and that's being good at underwriting insurance, right? At profitable levels.

[00:24:03] Jason Hall: And they've, they've struggled with that, right? We, we, the, that continues to be the thing that they don't, they don't deliver that, that's holding the business back even with their wonderful growth rates. You know, you have to be profitable as an insurer, if you're gonna be an insurer.

[00:24:15] Jason Hall: So understanding that gives you like the temerity to be able to, I dunno if that's the right word, but I'm gonna go with it 'cause it's a fun, fun word. It gives, it gives you, it gives you the be the ability to get through these environments and try to stay more objective about what you're gonna do. How much leash you're going to give them, how much rope you're going to give them, how much patience you're going to give yourself without taking, taking action. Because I know there's tons of people out there, dude, that would look at Lemonade and see, wow, 50% growth in premium, 20% customer growth, 20% or 30% average customer premium growth.

[00:24:54] Jeff Santoro: Triple digit revenue growth.

[00:24:55] Jason Hall: Yeah. Triple digit revenue growth and be like, Oh, whoa. Yeah. The market's stupid. I'm buying this. And it's like, bro, they're still losing a ton of money because they can't actually, underwrite insurance and you can avoid, I mean, it could still work out, right?

[00:25:12] Jason Hall: I own Lemonade, you own Lemonade and like you could get lucky and buy a business that's struggling to do the central thing they have to do well if they figure it out, right?

[00:25:21] Jeff Santoro: Yeah. It's also, I think it also depends how you buy, right? So if you're the kind of person that either buys a full position, whatever that is for you all at once, or if you're a kind of person that buys in thirds or quarters, you have to be a little bit more careful about when you buy and like what you're doing because you're gonna do one, two, three, four purchases and be done If you're more of a dollar cost averager, I think you can be a little bit more, I don't want to say, I don't know I don't know what maybe a little bit less discerning in terms of like this is a do or die decision. You know, if you if you buy another-

[00:25:58] Jason Hall: Well, the screw ups don't hurt as much. You can still, you know, you can still kill death by a thousand cuts. But-

[00:26:04] Jeff Santoro: You still want to be careful, but I just think it does matter, like, the kind of, and again, that's you having to know yourself and your strategy and having a plan and not just winging it. I think also Lemonade is a good, Lemonade's a good example of a way that by making yourself pause and think about why you own the business, you can also send yourself down a path of figuring out what the news from this quarter means.

[00:26:30] Jeff Santoro: And here's an example of that. You and I have been talking about Lemonade over and over again, their biggest issue is underwriting insurance, right? And getting the loss ratios down. So we know that. And we see this quarter, every, a lot of things look really good, but the loss ratios didn't. But then I think the next step as a person who's interested in like understanding investing a little bit more is to say to yourself or say to someone else that you're having a conversation with okay, so I know the loss ratios need to come down, they need to get better at underwriting insurance.

[00:27:01] Jeff Santoro: What can happen to make, like, what, what do I want to see happen that tells me they're heading in the right direction, right? So one of the things you and I talked about when we made the video the other day was, you know, they're still in the early days of rolling out car insurance, right?

[00:27:13] Jeff Santoro: They picked up what's the company, Metro Mile? They acquired it a year or two ago. And we talked on the video about, well, if they're able to bring in more and more customers and get more and more people buying car insurance policies, that lessens the risk to catastrophic loss, more people with car insurance policies helps the hurricane that comes through Florida not be as big of an impact to your insurance business as if you don't have all those people with the car insurance policies, you're spreading at your risk, you have geographic diversification, all those things.

[00:27:43] Jeff Santoro: You can't have that realization until you know, these are the metrics I'm keeping an eye on to tell me if Lemonade is on the right path and you're not going to get that level of nuance on the Internet typically. You're not going to get that on Twitter. You're not somebody that's going to be hot takes. This is garbage or this is going to emerge-

[00:28:00] Jason Hall: a bunch of anonymous complete strangers whose motivations I have absolutely no understanding of and I'm not sure if they actually have integrity or not. You mean that's not, those are, those are not trustworthy sources?

[00:28:12] Jeff Santoro: Right. It's really just The Smattering. That's where everyone should get all of their, that's it.

[00:28:17] Jason Hall: All entirely. Yeah, entirely.

[00:28:19] Jeff Santoro: All right. So let's go in a different direction.

[00:28:21] Jason Hall: Well, before, before we do, I want to build on that a little bit, because there's a couple of things that I think are useful too.

[00:28:26] Jason Hall: There's a lot of research that's been done on being right or wrong. And particularly as we've seen a lot of, I don't, I don't want to stumble into a political conversation here, but we've seen the political discourse devolve and wherever you, whatever your political bent is, we've seen misinformation become more of a thing, right? And there's been a tremendous amount of research that's been done that, that overwhelmingly shows that the bigger the stakes, the harder it becomes to admit when you're wrong.

[00:29:03] Jason Hall: So I think that's really important with again, a Lemonade as an example, or maybe to a lesser extent Fortinet, right? Which is again, it's a big cash cow company. It's, They're established. They're, you know, they're, they're not trying to reinvent something, right? They're participating in something that's really big and important and they're a disrupter and an innovator in it, but they're not You know completely trying to flip it on its ear like Lemonade is.

[00:29:31] Jason Hall: If you're the kind of person that makes those bigger one time Investments in a company, the higher the stakes are the more important it is that you get it right, the first time, right? And I think that's maybe the bigger thing. And that's one of the reasons with like Fortinet, for example, it was easier for me to kind of slow things down, because I do tend to dollar cost average into companies too. I'll build out my position over multiple years. And Fortinet, for example, like with this big drop that it had, one of the things that made it easier for me to not freak out, I want to circle back to that too, is sure you look at it and well, that's, I lost 25% on that stock.

[00:30:19] Jason Hall: But then I look at my portfolio and so far Fortinet's 1% of my portfolio, 0.25%, right? That was, that was the impact in aggregate on, on my, my wealth.

[00:30:33] Jason Hall: And that when you start reframing things in that way, it can make it a lot easier to be objective. And to be thoughtful about the decision you make, not overreact in any one particular direction. Give yourself some grace too and then move forward with whatever decision you want to make.

[00:30:49] Jason Hall: And often, this is the big one. I really wanted to say this, Jeff, often the best decision is none is not to make a decision.

[00:30:55] Jeff Santoro: Yeah. Yeah. It reminds me of, we had talked about this before two things, right? Knowing what your goals are. My goal is to have enough money to live comfortably in retirement. And then leading straight from that is the idea of what, what does your portfolio look like in the aggregate? And to me, , the way I've sort of phrased that in the past is focusing on the bottom line of your brokerage statement and not the individual lines. Look at the total.

[00:31:20] Jeff Santoro: Absolutely.

[00:31:21] Jeff Santoro: Because if I get to, whatever, if I reach my goal and I look one day and my entire retirement portfolio is up, I don't know, a thousand percent, then I don't care about the thing that went to zero back when I was 43. I got to my goal, you know, it's like, it's sort of like the ends and the means kind of a thing.

[00:31:44] Jeff Santoro: Yeah. All right. Absolutely. Absolutely.

[00:31:46] Jeff Santoro: So now I'm going to go in a different direction. What about when a stock pops during earnings season?

[00:31:53] Jeff Santoro: So we've spent 30 minutes plus now talking about how to sort of mentally get through when a stock you own drops massively after earnings.

[00:32:03] Jeff Santoro: Yeah, they go up too.

[00:32:04] Jeff Santoro: Yeah. So let's talk about how to mentally do the right thing when a stock you own jumps 10, 15, 20% after earnings, because I do think that's a different, actually a different thing. So what are your thoughts on that?

[00:32:21] Jason Hall: I think you're wrong. It's exactly the same thing.

[00:32:25] Jeff Santoro: I disagree, but I want to hear what you say first.

[00:32:28] Jason Hall: So I think if you understand why you own it, if you understand your goals, right, short term, long term. And again, you think about that business within the, within the context of what are you looking to achieve, right? Is this something you intend to own for 10, 20 years, right? You see this long tail of opportunity of growth for this business.

[00:32:52] Jason Hall: Nvidia, we can use that one as an example, right? Then, then you can look at a company that has a big pop, the stock's gone up a lot, right? And it's up a lot and it's on earnings and then it's also up a lot in the six months before, whatever it may be.

[00:33:08] Jason Hall: And then you say, okay, well, you know, I've, I, this is a business that I intend to own for another, hopefully 10 years if they keep delivering like this and avoid the mistake of, I think it was David Gardner, the first person that I heard say this is, is punishing your portfolio by selling a stock that did exactly what you bought it to do.

[00:33:29] Jason Hall: But, but I, I do think you also, you do have to, and I specifically chose NVIDIA because as, as you know, this is one that I actually, after it had a huge run up, I guess we're talking six weeks or so ago at this point, a couple of months at this point, maybe I chose to sell not all of it, I think I sold a good, a good chunk of it. Because it had become such a large portion of my portfolio. Based on my expectations of what it could generate over the next five to 10 years, I decided it was time to, to thin that position a little bit. And since then it's gone up another 15 or 18%.

[00:34:09] Jason Hall: So in the short term, it looks like I made a bad decision and like the macro, like the micro looking at that one stock, it was a bad decision. But again, thinking about trying to manage my entire wealth, manage my own actions and behaviors. I still think it was the right decision for me to make. I'm not fixated by this company anymore.

[00:34:29] Jeff Santoro: I agree with everything you just said. And that's why you sort of made my point. Because I do think the way you think about a stock that pops big after earnings is different than a stock that drops big after earnings.

[00:34:41] Jeff Santoro: And it's because there are more, what, what I think you and I would both consider to be legitimate reasons to trim a stock or maybe even sell it then based on like how well it's doing in, in relation to the rest of your portfolio, like it's becoming an outsized position or have the, or has the business just really gotten way too far ahead of itself.

[00:35:03] Jeff Santoro: And I just think it's a different calculation than when it drops. And. It is for exactly what you said.

[00:35:09] Jeff Santoro: So I'll give you, let's use Nvidia as an example. I wasn't in the position to think about trimming it because everything is such a small portion of my overall portfolio at this point. But if I were someone who had, let's say I had owned Nvidia for seven or eight years and it was already 2, 3, 4, 5% of my total portfolio. And then it has that crazy AI bump after the last quarter. Maybe I've already been a little uncomfortable with how big it is. Maybe I'm already maybe I should trim this back. And then all of a sudden I'm given like a 20 or 30% gift in a day or two. I think that's then maybe you do go trim a little bit and do the exact same thing you did. And you could be wrong or you could be right.

[00:35:53] Jeff Santoro: But to me, that's a different calculus than rules. Reacting after a drop. I don't know. That's just maybe I'm wrong. But I just think it's a it's worth thinking about a slightly different way.

[00:36:04] Jeff Santoro: But I also think it goes back to the same sort of fundamentals toolbox framework thing we're talking about, which is everything I just said is prefaced by the fact that there was a reason, there was logic, there was understanding, there was information, and it wasn't because of the stock pop, it was because of all these reasons, and the stock pop was maybe the thing that pushed the decision over the edge. So I don't know, I just think it's a little bit different.

[00:36:31] Jason Hall: So I, I agree, but here's the caveat, and I think this is the reality is we're humans and we're people, and we're really good at ready, fire, aim. Arriving at a decision that we want to make before we've actually done the research. And then, and then we just, we, we figure out a way to justify what we've decided we wanted to do anyway.

[00:36:51] Jason Hall: And I think that's one of the concerns about selling on the big earnings pop. So we decided to do it. And then we confirmation bias our way into doing what we just wanted to do. And we get- and it works out once or twice and just like you're buying stocks around earnings back when you didn't know what the hell you were doing, you get lucky once or twice and you think you're skilled, right?

[00:37:13] Jason Hall: And I think for most people, the reality is that sort of action is probably going to do more harm to your wealth building than it is going to be doing good to your wealth building.

[00:37:23] Jason Hall: So, back to the toolbox again, another one of kind of my foundational parts of my framework is being glacial about selling in general because you're more likely to hurt yourself than you are to help yourself most of the time.

[00:37:41] Jason Hall: Because again, to quote David Gardner and paraphrase David and Tom Gardner too, is the winning stocks generally continue to win. It's the ones that look a little bit overvalued that always outperform that, those are the ones that do it for 10, 20, 30 years, right? And those are the ones that we always end up selling because they've gone up a lot.

[00:38:03] Jeff Santoro: I agree. I'm not. I'm not advocating for wanton selling after pops. My, my whole point. Well, one, I wanted to argue with you a little bit because I think that's fun, but I also, because there, because there is a thing there, because there is such a thing as trimming positions that get too big, because that's a legit thing.

[00:38:26] Jeff Santoro: That's why I wanted to just differentiate that. Like I could see a better reason for making a move after a pop than a drop. However, I agree with you.

[00:38:36] Jason Hall: This is not, it's when people sell the lose, sell the winners and they go throw that money at their losers.

[00:38:41] Jeff Santoro: That's not what I'm talking about. Yeah, that's the other thing too.

[00:38:44] Jeff Santoro: The other time I think it's worth considering is, , you and I, I think probably more maybe than we should view investing through the lens of two guys in our forties who still have a lot of years ahead of us to make money and work forward. Invest and yeah, we could have listeners. I'm sure we do have listeners who are maybe very near retirement or in retirement and are still invested.

[00:39:06] Jeff Santoro: And when you're in that situation, people who run funds have the same challenge, which is I want to buy this other thing, but I don't have the capital, but I have to sell something to buy something. . And , sometimes you're in that position. So I, I just think there's, there are, there are reasons and opportunities to take advantage of a pop that I just view a little bit differently than the drop, but we don't have to belabor it anymore.

[00:39:29] Jason Hall: Well, that's one of the things just to tease. We, we are, we were kicking around the idea of having a doing a show that's maybe a little more focused around some retirement ideas too. So stay tuned for that. Yeah, for sure. All right. We got one more. We got one more thing we want to talk about.

[00:39:44] Jason Hall: Jeff. I have one question. And I think this is one that we're going to, I think we're going to argue, we're going to disagree on the margins. I think in general, we're going to have the same agreement, but I think it's going to be a fun, it's going to be a fun argument.

[00:39:55] Jason Hall: So how important do you think earning season is?

[00:40:00] Jeff Santoro: I think it is, it's both important and not important.

[00:40:07] Jeff Santoro: Goddamnit.

[00:40:08] Jeff Santoro: No. All right. I think it's important. I don't think it's important in the short term in terms of actions that investors should take, but I think it's very important for building and verifying your thesis and reason for owning a company or verifying some concerns you've had and reasons to sell.

[00:40:34] Jeff Santoro: So, let's use Twilio as an example, cause I believe it reports today or tomorrow. I think tomorrow it's a company that you and I have talked about on the podcast a bunch of times because it's very easy to summarize how the last couple of years for the company have has gone.

[00:40:51] Jeff Santoro: Growth up profitability down. Like that's, that's a lot of these companies, but especially Twilio, like a lot of the growth metrics have been looking good. Just not taking any steps towards profitability. I said over and over again, every time we talk about it, I keep holding on every quarter and I look forward to the earnings release because I want to see, is this the quarter that the net loss improves or the cash burn improves.

[00:41:21] Jeff Santoro: Now one quarter doesn't make a trend. So it could tick up this quarter and then it could head right back down the next quarter. But because I've already identified that as a thing I'm looking for with that company, I think earning season is really important because every three months I get a little glimpse into both the numbers, but what also what management says about it to see if they're in heading in the right direction or if they think they can get in the right direction.

[00:41:48] Jeff Santoro: I mean, if they came out today or tomorrow, whenever they report and they show a lessening net loss and they show less cash burn. And then they say something like we expect GAAP profitability to be by this date and it's a new it's a it's a closer date than they've said in the past or maybe they haven't said it in the past, I don't remember off the top of my head, that's enormously important. That might be the difference between me saying, all right, I have enough conviction not to sell to call back to another newsletter post that I wrote about a couple weeks, couple months ago to see if that actually happens moving forward.

[00:42:26] Jeff Santoro: So from that standpoint, I think it's. It's really important.

[00:42:31] Jason Hall: Yeah. It, it's, I think the key thing with earnings is it's, it's directionality, right? Because the reality is that for, for companies like it's, it's what they do in between, it's that three months of actual work that they do. That's what really matters. And earnings is we just get a chance to learn a little bit more about it. That's when they generally like actually tell us the, the what's, what's happened.

[00:42:54] Jason Hall: But even that, it's important- I mean, this is like, this is like little Susie's report card for the second semester of third grade. She might have had a really tough time in math, but she might still be an engineer when she grows up. It's just it's so I don't want to say meaningless, but it's just such a such a tiny piece of data for the most part. I mean, there, there, there are other companies where it does matter a lot more.

[00:43:25] Jason Hall: Like what's the, Jeff, what's your, your little biotech Outset Medical, right? The, the right now where they are in their business, like their third quarter earnings could be really, really important, like, because we're going to learn so much more about how the entire healthcare system is, is taking up their dialysis.

[00:43:44] Jeff Santoro: Here's where I will agree with you, with what you're saying. And I will amend what I said. I think it's important for every company to some degree. I think it's way more important for certain companies, and I think it's way less important for others.

[00:43:59] Jeff Santoro: I'll use an example from my portfolio, Microsoft. I own Microsoft and I I really don't pay that close attention to the earnings because it's just a huge sprawling business. There's so many different things they got going on. I look for the top line headline numbers because I think Microsoft is going to be fine. Like there's nothing that's going to happen in one quarter that would make me sell Microsoft, unless they were like, we no longer want to have cloud computing, you know, like something that's -

[00:44:29] Jason Hall: We're shutting Azure down and we're writing it down to 0. We're not even going to sell it.

[00:44:33] Jeff Santoro: We're going back to Windows and that's it. You know, like, right, you know, something like that. But obviously that's ridiculous. It's just a silly thing to say. I mean, you could put Apple in that bucket to some degree.

[00:44:43] Jason Hall: Well, so like a company like Starbucks is an example, you know, you look at the quarter and you're like, wow, they grew, you know, they doubled their China business. All this kind of stuff is like, well, not really, you know, China just opened back up for business and the business is healthy and we found out that it's healthy. And like, all you gotta do is read the news a little bit and you're going to know their labor relations is getting better in the U S and like it, it's nothing fundamentally changed. You know, it's just a little bit of information about a few months of, of business.

[00:45:11] Jason Hall: Here's how I think about it, Jeff. Like, this is really how I think about it is. With the Outset Medicals that like have something really major they're doing or companies that directionally, they've been burning cash because they went public to raise cash to get to profitability to grow right? They've got a bunch of money to spend to grow the business.

[00:45:29] Jason Hall: Are they like directionally, are they heading the right way? That's what I think is important for earnings and like for the big stable businesses the Microsofts the Starbucks of the world It's where the number's probably fine and for some reason, did the company just miss it?

[00:45:44] Jason Hall: Or maybe they said something on the earnings call about their guidance that the market hated. And has created an opportunity to buy, you know, where valuation kind of matters more for these bigger stable companies. That's when I think earnings matters. And it's not even as much, I think that the earnings matters is it matters how the street reacted to it.

[00:46:03] Jeff Santoro: Yeah. So, yeah. And it, I said it earlier, like, not no company goes up into the right in a straight line. And when it comes to the larger, more established companies, you really don't have to worry about. When they do miss earnings or, you know, miss the EPS by a couple cents and all of a sudden, the stock sells off 5%, that can be something worth paying attention to because, you know, they're going to be fine. Like there's a very low chance that this is the beginning of a trend where their earnings for share declines continuously for the next several quarters. Like that's probably not going to happen.

[00:46:40] Jeff Santoro: So, for those who are dollar cost averagers, sometimes those can be, little kind of low stakes opportunities I think when stuff like that happens.

[00:46:50] Jason Hall: Yeah, exactly. Wanna take a break, Jeff?

[00:46:53] Jeff Santoro: Let's do it. Let's take a short break and we'll come right back.

[00:46:56] Jason Hall: Hey, everybody. Welcome back. We announced in our episode, our one year anniversary episode last week, we were going to be trying something new and it could come as bonus content instead of just the once a week podcast drop. So stay tuned for that to start happening semi regularly, The Smattering Rough Cuts.

[00:47:16] Jason Hall: But Jeff and I've decided we're our first The Smattering Rough Cuts is the B segment for this week's show. So, to start it off, I'm going to read...

[00:47:29] Jeff Santoro: Wait, before you do, let's just say, we did not prepare for this at all. We're just going to, we're going to hit record and just talk and we'll see if it's any good.

[00:47:38] Jason Hall: Yeah. Now this is gold. This is gold, Jeff.

[00:47:40] Jason Hall: So, so Jeff, this started off, you, you, you texted me this cause you're the guy, you, you read, you read the earnings when they come out and I don't, right. And this is, this is one of my favorite, favorite CEOs, favorite founders here that said this, but I just think it's so, it's so wonderful. I want to read just this one little line right here. It's two sentences. Then I'll tell you who it is. Why do you anoint it? So this is speaking to Wall Street analysts.

[00:48:10] Jeff Santoro: Oh, I know what you're talking about now Okay,

[00:48:12] Jason Hall: Why do you anointed analysts on this call applaud low deposit betas? Are we not as an industry celebrating screwing the customer?

[00:48:25] Jeff Santoro: I know exactly who that is. I remember sending that to you now.

[00:48:28] Jason Hall: This is Chip Mahan. He's the CEO and chairman of Live Oak Bank. So Live Oak Bank, their business model is very different than most, most banks. So they focus their lending on small businesses. So they're like, their tagline is, you know, our goal is to be america's bank for small businesses.

[00:48:48] Jason Hall: But their deposit base, Is mostly internet savers, right? So people that are looking for high yield savings or a CD or something like that. And I think they're, what is their yield right now? It's like 4% they pay on savings, 3%, 4%. And they can do that because they don't have 3% mortgages on their books. They do all these adjustable rate small business loans, right? That go up.

[00:49:12] Jason Hall: So, so Jeff, my question for you, you sent this to me. You remember texting it to me.

[00:49:18] Jason Hall: I do. I do.

[00:49:19] Jason Hall: What did you think when you first read it?

[00:49:22] Jeff Santoro: So I have a, an absolute love in my heart for CEOs who don't care about Wall Street. And also I love when anyone throws shade at analysts. It just cracked me up. I think it's fantastic. It's the reason I love Berkshire Hathaway. It's the reason I love Boston Omaha. You know, you don't get an earnings call. You just get sometimes not even a press release. It's just like, here's an SEC filing. You you go do the work. I love that.

[00:49:53] Jeff Santoro: It's so few people that do it. That it just makes me super happy. Another one that comes to mind. I believe it was Winmark. Their CEO, a quarter or two

[00:50:04] Jason Hall: Winmark owns Play it Again Sports, right?

[00:50:06] Jeff Santoro: Yeah, I believe the entire press release was one line and it was something like, we're very pleased with how the year has started or something like that. Like that was the whole

[00:50:17] Jason Hall: right. Right.

[00:50:18] Jeff Santoro: But you know, it's, yeah. So I, , so my first thought was like, I just love when these kind of things happen. That's why I had to send it to you. But it actually got me thinking like it, it's, it's so routine and normalized for these CEOs to just answer these questions. And some of them are insightful and good.

[00:50:39] Jeff Santoro: And some of them are just ridiculous. They remind me of athlete interviews, right? Like when they go up to the athlete that just lost.

[00:50:46] Jason Hall: They thank their mama. They thank Jesus. They thank-

[00:50:48] Jeff Santoro: Not even that. It's not even the responses that bother me. It's the fact that they ask the questions, like they'll go up to like, yeah, like you team just loses a playoff game and they go up and say, you just lost your season's over.

[00:51:01] Jeff Santoro: How do you feel?

[00:51:03] Jeff Santoro: Right.

[00:51:03] Jeff Santoro: Well, how do you, how do you think they feel? They probably feel pretty terrible, you know, so here he was, you know, just to go back to-

[00:51:10] Jason Hall: this was this was maybe this was the equivalent of I have Alan Iverson's we're talking about practice.

[00:51:16] Jeff Santoro: Well, I mean, he's basically saying like you guys ask questions about low, you know, low yields for customers like it's like a normal good business thing, and it shouldn't be, we're talking about screwing the customers. And I just happy he said that. I think that's great.

[00:51:32] Jason Hall: Talkin' about practice.

[00:51:33] Jason Hall: So I, I take, so I'm a huge fan of Chip Mahan, right? We're going to have to, one of these days, Jeff, we're going to have to have Lou Whiteman back on to talk about like everything that happened with the banking industry in the eighties through the nineties, basically all like around Charlotte, North Carolina, when all of this stuff was was happening with Bank of America and Wells Fargo and kind of the bank, the, the changing from this regional banking industry to now that we have like these monolithic, you know, half dozen institutions and Chip Mahan was kind of in the middle of all of that.

[00:52:09] Jason Hall: But the thing about like, so here's the thing, I take a much more cynical view of this. Before he made that comment that are we not as an industry celebrating screwing the customer he describes Bank of America's deposits business and the fact that they pay an average in the second quarter 22 basis points point two two percent is what the bank with the second largest deposit base I think there's the second largest behind JP Morgan Chase maybe the largest, but I think it's the second largest anyway, anyway, it's one of the two largest by deposits.

[00:52:45] Jason Hall: And they pay a pittance. They're actually, their, their cost to gather those deposits is six times as much, right? Then they actually even pay, they pay like the, the branches and the branch employees and all that kind of stuff, right? So it, and again, based on their entire business model, this was the, the most self serving thing the CEO of a bank that's based on the internet that pays high yield savings as a feature to draw deposits so then they can fund high yield loans to small businesses. He's the one guy that can say that, and he's also Chip Mahan, who's been around forever and like when these analysts daddies were analysts, he knew him, right? So he can get away with it. That's the way I think about it.

[00:53:35] Jeff Santoro: I mean, yeah, look, I'm, I, none of these guys are a hundred percent altruistic, you know what I mean? Like they're, he, he also, he says that probably also, you know, he, he knows that that it's a smart thing to say as CEO of this company. It is his company's competitive advantage. I get all that. I'm not naive to it, but still feels good.

[00:53:55] Jeff Santoro: I mean, having listened and read so many earnings transcripts and learnings calls, it's, it's just refreshing when

[00:54:01] Jeff Santoro: they're milk toast, man, they're all milk. They're so,

[00:54:04] Jeff Santoro: they're hard to get through, you know, and it's so much, so much of it is like, you know, just to rant on earnings call transcripts a little bit, earnings calls, you know, there, there's two things about them that drive me crazy.

[00:54:16] Jeff Santoro: One is when it's just a long litany of like things that the company offers, like almost like a list of their products that gives you no insight about the actual business. It'd be like if you listen to the McDonald's earning call and they were like, we sell hamburgers and we sell French fries and our French fries go in a fryer and we, then we put them in a little container. We hand them to people. Like has nothing to do with how the business is doing. But that's kind of the detail some of these software companies go to.

[00:54:40] Jeff Santoro: And then the other one that drives me nuts is then the CFO just reads the results that you can just go look at the,

[00:54:47] Jeff Santoro: they literally read the press release.

[00:54:49] Jeff Santoro: Well, not even that. Like I don't need the person to say to me. You know, gross profit went up 60 basis points and revenue was up 24% and earnings per share was down 3%. That's, I can go read that.

[00:55:01] Jeff Santoro: It's actually more interesting to go read that in the, in the 10 K or the 10 Q. Cause it will say the same thing and then it'll say, because of. This was impacted by, an offset by, and then you actually get some information.

[00:55:14] Jason Hall: You get some commentary. Right.

[00:55:16] Jeff Santoro: Yep. So yeah, I didn't expect us to be ranting about earnings calls, but they, they drive me nuts. I mean, once you read enough of them or listen to enough of them, you, you sort of learn how to just skim. And stop when it's something substantial, right? But yeah, it's just, and can I, let me, let me go.

[00:55:32] Jeff Santoro: I'm on a little bit of a rant here. Let me go one, one step further. It's 2023. Zoom exists. Riverside exists. That's what we're recording on. You can buy a nice USB microphone for like a hundred bucks. Why are we still listening to these earnings calls on like literal phone line conference call? I'll start to dial. Yeah. The sound quality is terrible. I think this is a business opportunity. I hope an entrepreneur is listening.

[00:56:02] Jeff Santoro: Someone should if maybe this business exists, I don't know, maybe Quartr, the Quartr app can do this. Like sell to companies like earnings calls as a service. Like we will come to your corporate headquarters. We will set up nice microphones or maybe you could just, I don't know, maybe Zoom can do this.

[00:56:20] Jason Hall: Bro, it's 2023. Everybody has this now. COVID. Everybody has the equipment on their computer.

[00:56:28] Jeff Santoro: It drives me nuts. Like

[00:56:29] Jeff Santoro: everybody does. I'm with you

[00:56:30] Jeff Santoro: throw it up on YouTube too. Like, you know, the fact that you have to like, log in, you ever try to like, actually watch one live, you have to log in, give your email address.

[00:56:37] Jeff Santoro: It's like,

[00:56:37] Jason Hall: it's garbage. It's so stupid. So stupid. So ridiculously stupid. I, yeah, I agree. That's one of my biggest frustrations is like for the day job, when I'm going to like find a transcript or just actually just even find that like the earnings presentation, because a lot of times they like give you nice consumable bites of like the KPIs. You can like find the stuff that you really want to notice if it's changed. And you have to put in your email address and register for it. It's like, bro.

[00:57:05] Jeff Santoro: Yeah. Now that's, well, the other, so, all right, here's another pet peeve. Cause we actually just talked about this before we hit record. Not many companies do this, but some of them do.

[00:57:14] Jeff Santoro: And the one that I follow that does this, that drives me nuts is Airbnb. They put out a press release for earnings that says we released earnings. And then you have to go back to the investor relations website To actually find the shareholder shareholder letter. Someone's had this on twitter several months ago like something along the lines of like Companies that do this should be like, I don't know the ceos should go to jail or something

[00:57:38] Jason Hall: Ceos to Gitmo.Let's send them to Gitmo.

[00:57:41] Jason Hall: Yeah, it was like

[00:57:42] Jason Hall: no, it's true. MercadoLibre did that. I just was on this podcast I was talking about I haven't read- It's my biggest stock and I still haven't read their earnings report and it's been out for five days.

[00:57:51] Jason Hall: Well, like you look on there- of course, this is great for, this is really good for, you know, audio format to describe something that's on a computer screen, but you're looking at their press release and it says notices and then it has them by date here. And it says August 2nd, Mercado Libre Inc reports second quarter 2023 financial results. Great. And then I click, and then I click on that link and it opens a PDF that says Montevideo, Uruguay company reported earnings and a bunch more words that are just words that say we reported earnings, but not the earnings.

[00:58:30] Jason Hall: Oh no. I got to bleep that out. Okay. But you got to bleep it. You can't just delete it.

[00:58:35] Jeff Santoro: I don't even know how to do that. I think I was going to leave it.

[00:58:38] Jeff Santoro: Just leave it.

[00:58:38] Jeff Santoro: Just leave it.

[00:58:40] Jeff Santoro: I think that's a perfect way to end our first ever Smattering Rough Cuts with you dropping an f bomb and me saying I'm not going to edit it.

[00:58:49] Jason Hall: I got a lot of problems with you people and now you're going to hear about it.

[00:58:52] Jeff Santoro: So give us some feedback. If you thought, if you liked the last 12 minutes let us know and maybe we'll do more of these.

[00:58:58] Jason Hall: Yeah. And if you don't like them. Maybe we'll do more of these.

Jeff Santoro: Yes.

Jason Hall: All right, Jeff. We did it.

[00:59:04] Jeff Santoro: We did it.

[00:59:06] Jason Hall: All right, friends. As always, we love to give our answers to these hard investing questions. We love to rant, rave, and bitch as well, but it's up to you to do your own ranting and raving and to find your own answers to these hard questions. I absolutely believe in each and every one of you. You can do it.

[00:59:22] Jason Hall: All right, Jeff. We'll see you next time.

[00:59:23] Jeff Santoro: See you next time.