"Give people more than they expect and do it cheerfully."
I'm not sure who it was that first coined the quote above but it happens to be one such axiom by which I always seek to live - and, with each opportunity, I try to reinforce this message to my kids. Sometimes they get it and sometimes they don't, but they always find it convenient to remind me of that message around Christmas and birthdays, but that's a story for another day.
I think "giving people more than they expect" is a fundamental message and a building block that many business leaders and managers appreciate - specifically CEOs of the world's largest companies to even the smallest of startups. While the "doing it cheerfully" part is optional, the operative word in the message is "expect" or more importantly, managing expectations. Because how do you know where or how to exceed expectations, unless you first had a hand is establishing what people should realistically anticipate or look forward to?
Expecting low expectations
I read a quote recently on one of my articles discussing the recent earnings of Sirius XM (SIRI). The comment was both mundane yet poignant at the same time. Because, not only did it highlight the state of affairs of the company, but (to me) more importantly, it underscores the state of mind of those who invest in it. It seems too often, we are quick to sacrifice our own expectations for "loyalty." I think in the stock market where only (at least to me) money matters, this is an example of gross neglect of what should be our true investment objectives.
The commenter, WLuddy said the following:
Clearly the reader was angry, which then made me question (as Rocco pointed out) whether the anger was accurately targeted? However, what the reader pointed out (while citing recent YOY projections vs. year end results), is what every Sirius investor already knew - Sirius (as he says) "always lowballs" guidance. And then asks, "Why in the world would you believe the 1.3 is realistic." In other words, take the numbers at face value and expect more.
Though he has made a good case for anticipating that the company will exceed its own projections, this is where I fundamentally disagree. Not because I doubt the company's ability to meet the 1.3 million subscriber guidance, but because as investors, we have reached a point where we expect low expectations. This has the potential to be a dangerous mindset long term. Furthermore, the reader went on to point out that the company, or specifically (as he puts it) "MEL never ever misses on projections" while also conceding that "he always lowballs." To me, this was the poignant and most crucial part of the revelation as we sometimes fail to see the correlation between constantly meeting expectations that were already low to begin with.
It's not a lie if you believe it
The other point that I want to raise has to do with the comment below from a reader named verenous. I appreciated the comment because it also draws attention to a segment of the Sirius investor community that wish to think that there is something sinister going on in the company that borders on conspiracy and illegal activity with Liberty Media (LCAPB) - they are trying to "keep the share price down" for perceived ulterior motives. The comment is as follows:
First and foremost, to be perfectly fair, verenous did not say anything that many Sirius investors have not already said (or at the very least) assumed to be true. So don't take this as me beating up on his comments. I think it is something very important that we need to discuss as it also hints on the topic of mistrust. So essentially, in the same breath that many investors are quick to preach undying loyalty to a company, many are also quick to defend the same company while at the same time suggesting that they are being cheated. This does not make sense and speaks to the lack of understanding of what our investment objectives should truly be. At least that's the way I see it.
Which leads to another topic that often gets over looked - it's the idea that "it's not a lie if you believe it." Said another way, excuses - we make tons of them for the company when our expectations fall short. The question is why? Why are we not willing to hold the leaders of our investments to a higher standard?
Motivational speaker Tony Robbins once said, "If you do what you've always done, you'll get what you've always gotten." Many reading this article will likely take it as a "bash piece" on Sirius XM, but tell me one negative thing or untruth I've said about the company. Instead this article is about having high expectations and upholding a promise that I made to myself when this new year began. The message is consistent with precisely what I've said recently and long before the company's disappointing earnings projections, which is simply it was time to expect more.
I think Sirius will eventually break $2.18 with confidence and then trend higher because my target remains $2.50. But in the near term, absent some sort of anomaly, it will unlikely happen until the company raises guidance and give Wall Street what it wants by hitting major league homeruns in major league parks. Simply put, Sirius needs to raise its own level of expectations.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in SIRI over the next 72 hours.
Additional disclosure: Author may initiate a short position in SIRI at any time