With 3rd quarter earnings coming out now every day, I know that I should be listening or reading releases and call transcripts for all the companies I own and especially any new ones and any that may be on my watch list.
That can be a lot of work, especially for me since I have quite a few stocks I own and want to follow.
Well, I recently found out that AI does this for you. I have perplexity on my phone (it’s free) but you can use ChatGPT or any other AI app. You simply ask it to summarize the latest earnings release and conference call for your favorite stock symbol and ask it to include both positive and negative points. It quickly comes back with a great summary and lets you ask follow up questions like what were the major questions during the follow up, etc.
I recognize that it may have some mistakes but it’s a great starting point and very simple and quick to read.
Anyway, maybe everyone already knew this already but if you didn’t, try it out, you may be pleasantly surprised! I was, it’s a standard process for me now!
There are also services like Fiscal.ai that provide the call in audio format, transcribe to text, and provide an optional summary automatically. I do agree that the overview component of these can be helpful. I would, however, urge caution and encourage prudent investors to still double-check the numbers and run through at least the Q&A once in completeness for positions you are holding/thinking of purchasing as these tools are known to be error-prone. It would be a shame to lose one’s hard-earned money on a technicality.
I have a standard question I ask AI, immediately prior to entry exit actions to confirm if any recent changes since my last confirmation from guidance. I ask for quarter over quarter and year over year revenue growth % reported in a standard format. While this needs to be validated, it does provide a quick way to validate. When significant changes from guidance occur, further investigation is justified.
I would challenge this part that it takes too much time to review the earnings transcripts for companies we own. Realistically it may take 30-45 minutes to re-read the prior transcript. I’ll usually re-read the transcript 1-2 days before the company reports, or even the same day so the information is top of mind.
The earnings season happens only once every three months, so we are looking at maybe a 5-10 hour time commitment per 3 months. I don’t think asking AI to summarize a report is nearly as effective as actually reading them. There’s been a number of recent threads about the huge limitations to the approach mentioned here, especially the positive spin that AI layers on top.
If we own so many companies that it’s impossible to review all the transcripts for the companies we own, it is a sign we own too many companies. It’s also not really Saul style investing if owning so many companies is overwhelming us.