NEW YORK (Real Money) –- Does tone matter? Should we care about inflection and word choice on conference calls?
You bet we should. Here's why.
Both CEOs, Dave Cote and Pat Doyle, played it straight, giving you the highlights and then telling you their stories. In each case, the confidence they had about the future ran throughout the call. Most important, they gave you very little reason to sell because, alas, there weren't really any reasons to sell.But go back a previous quarter. In each case both men spent an inordinate amount of time talking about the negatives -- or at least, as I would describe it, telling you things they might be worried about or weren't happy with. In both cases the reaction was instantaneous. The caveats struck home and caused sellers to come in, sellers whom I think felt less positive about the story going out than they did going in. Now if you go back and read the transcripts of those last quarters, here's what you will discover: they are entirely consistent with what was reported this quarter. For example, I thought that on the last quarter Domino's really pressed the issue of higher cheese prices. Given that it's a franchise model, frankly, I thought it was an over-the-top negative discussion. I like Domino's because it is a franchise power house that's not dependent on raw cost variables like cheese.