#94 - Michelle Leder - “There Are Some Companies That We Know Are Sort of Bad Eggs"

50 minutes

In Episode 94, we welcome entrepreneur, author, and SEC filings expert, Michelle Leder.

We start with Michelle’s background. She was a business journalist – a self-professed “document geek.” She wrote the book Financial Fine Print: Uncovering a Company's True Value and decided to launch a website as an accompaniment to the book. Here we are, 15 years later.

Meb asks Michelle to give an overview of what she’s looking for in the various filings. She tells us that changes are important. She doesn’t necessarily look closely at the numbers because it’s more about the language. Also, the forward-looking statements can be big. Michelle mentions an example of one that used a significant amount of extra language.

This dovetails into a discussion about the process – is it a keyword search or is there software? Michelle uses both, as keywords alone don’t always work. She gives the example of when Goldman Sachs was subpoenaed, the language used to describe it in the filings was something like “an invitation to respond to the DOJ.”

Meb asks for examples of red flag behavior in the filings. Michelle looks for unusual compensation or stock grant amounts. Also, lots of extra language used to describe earnings or adjusted EBITDA. She mentions a company called GT Advanced Technology, which used to be an Apple supplier. In one particular filing, they added new disclosure language, identifying their dependence on Apple, and their vulnerability if that relationship soured. Some time thereafter, Apple ended the relationship.

Next, Meb and Michelle discuss the “Friday Night Dump.” This is the 90 minutes after market close on Friday, when there’s no major trading. Companies tend to dump all their bad info here. Michelle mentions recent examples using Tesla and Wynn. But her most memorable disclosure dump was Chesapeake Energy, revealing it had paid over $12M for a map collection.

Meb asks if Michelle has ever been contacted by a company she’s profiled, trying to defend or explain itself. She mentions Dell. Apparently, the company once purchased a company from Dell’s own brother and something seemed a tad off. After Michelle covered it, Dell reached out to tell her she had gotten it all wrong.

This is a fun episode with plenty more in it – what sort of time commitment this would take the average investor… the atmospheric changes Michelle has seen in the last 10-15 years… the story of Meb stealing someone else’s disclosure language for his own blog but forgetting to remove the other company’s name…

There’s even a discussion of something Twitter did recently that grabbed Michelle’s interest. If you’re a Twitter investor, you might want to listen.  

All this and more in Episode 94.

More episodes from The Meb Faber Show

#187 - Kevin Carter - The Thing That’s Emerging Are The People, It’s All About The Consumer

In episode 187 we welcome our guest, Kevin Carter. Meb and Kevin start the conversation with some background on Kevin’s career, getting to know Burton Malkiel, and launching EMQQ. 

Kevin …

The Best Investment Writing Volume 3: Scott Bell – The Asset of Gratitude

Last year when we published The Best Investment Writing Volume 2, we offered authors the opportunity to record an audio version of their chapter to …

#186 - Carter Malloy - I Looked At Farmland And Realized…It’s Wildly Inefficient

In episode 186 we welcome our guest, Carter Malloy. Meb kicks off the conversation with Carter’s background in finance and growing up in a farming family. When conducting research on the …

The Best Investment Writing Volume 3: Larry Swedroe – Investment Strategy in an Uncertain World

Last year when we published The Best Investment Writing Volume 2, we offered authors the opportunity to record an audio version of their chapter to …

#185 - Ben Claremon - Value Investing Will Always Have A Place

In episode 185 we welcome our guest, Ben Claremon. Ben and Meb start the conversation with some background on the blog Ben started in school, The …

#184 - You Could Have Missed...

Episode 184 is a Meb Short. In this episode, you’ll hear Meb discuss the CAPE ratio, flawed logic behind the conclusion that “CAPE doesn’t work,” probabilistic investing, and a global …

How you can listen to this podcast

You can listen to episodes right here on the website, or if you prefer, in a podcast app. Listening in an app makes it easier to keep track of what you’ve already heard, listen without using your data plan and many other conveniences.

Recommended apps
Start listening to #125 - Tom Barton - The Biggest Problem Investors Have is Things Change...and They Don't Change
1:24:56
Start listening to #125 - Tom Barton - The Biggest Problem Investors Have is Things Change...and They Don't Change
1:24:56