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Re: Finanacial Fantasy Land
Posted by: RodgerRafter
Date: 03/03/2007 09:26AM
Also, Mike Klein had these comments to add two years ago:
I took the time to listen to the call myself tonight. I'll just add a little to Rodger's excellent comments.
Clearly the impression they want to give is that everything is about growth, growth, growth. Not one single concrete warning about potential downsides, even while starting off the conference call summarizing the competitive environment as challenging with both rising interest rates and increased competition. But they can grow, improve their operations, sign up more loan officers, get higher productivity, continue to increase borrower quality. The only half-way acknowledgements of possible problems were when pressed really hard by analyst questions (who were actually very polite but they were clearly unhappy with the depth of answers). Every last risk brought up by analysts was waved off with something New Century could do better than the competition, or that just didn't matter because the analyst must have interpreted their data wrong.
Numerous analysts tried to ask how New Century would achieve their guidance given that margins had recently suffered and the conditions causing that were not improving, in fact may get worse. For questions like this, they handed the mic over to Patti Dodge the CFO who went into such mind-numbing incomprehensible detail that analysts, in every case, just responded with "Uh... thanks." It didn't help that the company's structure is incredibly complex with a REIT subsidiary and many other things I can't begin to comprehend (you just have got to see the company description in the 10-Qs and 8-Ks to get a flavor of this).
On the whole, not being that familiar with the industry, I thought at the time the presenteres did a pretty good job. They had answers for everything and were consistent. But after letting it sink in for a few hours, the consistent focus on absolutely certain growth in the face of the fully admitted challenging environment of the next year was just bizarre, even without understanding half the terms used. At least half a dozen analysts tried to pry more out of them and they didn't give an inch. Everything would work out fine.
I did not get the impression that these people are crooks. I think they are simply on drugs. They appear to believe what they say.
Now, there was one other funny thing. After the conference call ended the mic was still on for a few seconds. The CEO can be heard saying "Despite being down 5 bucks, my compliments..." and then some laughing. They must have been watching the stock price.
It's unclear when this thing blows up, but I am now totally certain it will. Whether crooks or just stupid, I am certain this management will drive NEW into the ground.
Oh BTW, did anyone notice that the CEO is the Co-Chairman of the Compensation Committee?
-Mike (Klein, not Mish)
I took the time to listen to the call myself tonight. I'll just add a little to Rodger's excellent comments.
Clearly the impression they want to give is that everything is about growth, growth, growth. Not one single concrete warning about potential downsides, even while starting off the conference call summarizing the competitive environment as challenging with both rising interest rates and increased competition. But they can grow, improve their operations, sign up more loan officers, get higher productivity, continue to increase borrower quality. The only half-way acknowledgements of possible problems were when pressed really hard by analyst questions (who were actually very polite but they were clearly unhappy with the depth of answers). Every last risk brought up by analysts was waved off with something New Century could do better than the competition, or that just didn't matter because the analyst must have interpreted their data wrong.
Numerous analysts tried to ask how New Century would achieve their guidance given that margins had recently suffered and the conditions causing that were not improving, in fact may get worse. For questions like this, they handed the mic over to Patti Dodge the CFO who went into such mind-numbing incomprehensible detail that analysts, in every case, just responded with "Uh... thanks." It didn't help that the company's structure is incredibly complex with a REIT subsidiary and many other things I can't begin to comprehend (you just have got to see the company description in the 10-Qs and 8-Ks to get a flavor of this).
On the whole, not being that familiar with the industry, I thought at the time the presenteres did a pretty good job. They had answers for everything and were consistent. But after letting it sink in for a few hours, the consistent focus on absolutely certain growth in the face of the fully admitted challenging environment of the next year was just bizarre, even without understanding half the terms used. At least half a dozen analysts tried to pry more out of them and they didn't give an inch. Everything would work out fine.
I did not get the impression that these people are crooks. I think they are simply on drugs. They appear to believe what they say.
Now, there was one other funny thing. After the conference call ended the mic was still on for a few seconds. The CEO can be heard saying "Despite being down 5 bucks, my compliments..." and then some laughing. They must have been watching the stock price.
It's unclear when this thing blows up, but I am now totally certain it will. Whether crooks or just stupid, I am certain this management will drive NEW into the ground.
Oh BTW, did anyone notice that the CEO is the Co-Chairman of the Compensation Committee?
-Mike (Klein, not Mish)
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