Maven: Straight Talk
While Ms. McLean stands as the Patron Saint of All Good in Business Journalism, The Business Press Maven also wants to fall at the feet of Jeff Matthews this week. Mr. Matthews, who writes the "I Am Not Making This Up" blog, took a stiletto to KB Homes (KBH) in a way that needs to become more common: He was not fixated on the numbers expectation game, which puts the company at the advantage as they, their flaks and the investment banks manage the numbers to within a whisker of their lives.
Rather, Mr. Matthews merely compared what was happening (order cancellations) to what the company said would happen just a couple of months ago. Back then, the company prattled on publicly about how business was groovy, even improving in weaker markets.
Comparing and contrasting claims vs. reality is much more helpful to investors than telling them that a company hit a particular set of numbers, without even telling them if the numbers were last tweaked a year before or two seconds ago.
Another thing that gives investors only a soupcon of guidance is what you also saw with KB Homes coverage (see: The Wall Street Journal): a mention of the cancellations, then a sprint right to corroborating evidence in the form of Toll Brother's (TOL) recent bad news.All fine and good -- but management also needs to be hoisted by the petard of their own words, a la Mr. Matthews.
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