Investing 101: Don't Be Fooled by Corporate Jargon
My goal was not to be cynical. While I do believe the majority of CEOs do conduct themselves with some modicum of honesty and integrity, the Enron bankruptcy taught us to appreciate the things CEOs say with a bit of skepticism until the evidence proves otherwise.
In this article, we will uncover ways investors can pick out "management speak," also known as "corporate jargon," or words that sound good but are often filled with superfluous non-achievements. Let's find the true meaning of vague statements like, "We're taking action to improve execution" so that investors can arrive at what it is that really moves the business and company forward.
Take, for instance, that particular quote above, which was coined by former BlackBerry
In fairness, though, Heins is not alone in "talking the talk." For instance, although IBM
As with the vague statements made by Heins, in response to recent threats to explain IBM's recent 4% revenue decline, the company's CEO Ginni Rometty said, "We're going after higher margin businesses." Investors seemed content with the statement. What does that even mean?