Any good investor would know to dial in during quarterly stockholders’ meetings. Most meetings are done via conference call, and may be very informative for people with the acumen to predict market movements-based figures culled during the quarter of the fiscal year.
Early into the call, one of the speakers, usually the operator, reads a statement better known in the business as the safe harbor statement. United States laws require it to be said before any stockholders’ meeting, hence its other name: forward-looking statements. Forward-looking statements are statements that may appear predictive toward favorable or unfavorable ends. The operator or speaker warns against depending on them to make actual business decisions.
Thus, it can be said that forward-looking statements are not completely accurate. The statements are merely reports of how the books are during that particular part of the business cycle, and reliance on them for actual results should be limited to the figures released during the calls.
There is an allowed part in the conference call where stakeholders could raise concerns. Callers in the conference calls, sometimes, belong to financial institutions that made investments in the company and have critical questions relating to numbers and the business environment. Rarely are safe-harbor statements made as bases for the questions, and when they are, executives are quick to correct any misconceptions arising from safe-harbor statements.
In this regard, the common investor should focus on the actual figures presented, and would only take note of safe-harbor statements as guideposts. The foundation of decisions should still remain with real-world market conditions.
JSK Associates is a global investment adviser firm specializing in asset planning. For more information, visit www.investtowin.com.