This Is the Week Our Calls Get Graded
Before three companies reported, we published the exact test each had to pass. This week the results grade us, in public. Micron Tuesday, Nike Wednesday, Pepsi Friday.
Most investing coverage waits for the number, then explains why it makes sense. That is the easy half. The hard half, the half worth paying for, is a call made before the number, specific enough that the number can prove it wrong.
We made three of those calls. Before Micron, Nike, and Pepsi reported, we ran each through the Stock Story Firewall, named the single assumption its price depends on, and wrote down the one thing the print would have to show to confirm it. In public, with a date attached.
Two of those prints are now in. One lands Thursday. This week we put our calls next to the results and grade them, the same way we grade the companies.
Here is what each day settles.
Tuesday is Micron. We called it a Watch and said a record margin would not be proof, because the one number that would prove it, the margin on HBM alone, is the figure Micron refuses to disclose. Micron then posted the highest margin in its history and hid that number again. So we did something we will lay out Tuesday. We estimated it anyway, from three sources Micron does not control, and the answer changes how you read the record.
Wednesday is Nike. We told readers to ignore the revenue and the headline margin and watch one figure underneath. Nike printed a beautiful headline, a gross margin up nearly nine points and net income up 407 percent. Wednesday we strip that headline back to the real number, and grade the trap we called a week early, the one line the company hoped you would not remove.
Friday is Pepsi, which reports Thursday morning. Before it does, the bar is already set. The recovery is real only if the volume came from the brand, not from promotion, acquisitions, and commodity accounting. Friday we grade the print the day after it lands, then close the week with one scorecard across all three names.
One idea runs through the whole week. A call you can check beats a take you cannot. By Friday you will have seen three of ours checked against the tape, the clean wins and the honest two-sided fights, because a track record is only worth something if we grade our draws the way we grade our hits.
The week starts now. Tuesday, Micron.
Read this week’s coverage as it lands at readthelongview.com.
Not investment advice. The subscriber decides.