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Earning your CEO stripes


Earning your CEO stripes

For those of you looking for some relief from the trails and tribulations of investing; we had to laugh when we read this excerpt from the transcript of a conference call between analysts and Cliffs Natural Resources Chairman, President and Chief Executive Officer Lourenço Gonçalves. 
Cliffs Natural Resources Inc. is a higher-cost iron ore producer in North America.

There’s no question about the humorous value in this dialogue. However, the question that remains is whether analysts are less likely to put a negative rating on a stock following such interactions.

If any Australian CEOs reading this blog are getting ideas… Our advice: don’t. Just have a well-earned chuckle.

The next question is from the line of Sam Dubinsky from Wells Fargo. Your line is open.

Q. Sam D. Dubinsky: “Great. Thanks. Thanks for taking my question. Just in Q3 looks like pricing was pretty good in the U.S., better than I thought based on where spot is. Was there any higher priced carryover tonnage from the first half? Just because I know there was some supply disruption that pushed H1 into Q3 a little bit? And then I have a couple follow ups.”

A. Lourenço Conçlaves: “Sam, I appreciate you saying thank you for taking your question, but I’m not going to answer your question, because you already knew everything about my company. You have a $4 price target and you think that we can’t sell assets. So I’m going to take the next question. I’m not going to answer you. Next question, operator, please.”

The next question is from the line of Lucas Pipes from Brean Capital. Your line is open.

“Hey. Good morning. This is actually Fred Hathmire on right now for Lucas Pipes. I just wanted to ask, Lourenço, what has the biggest surprise been since you joined Cliffs.”

A. Lourenço Conclaves: “I’m sorry. Say it again?”

Q. Fred Hathmire: “Sorry about that. Just asking this morning, what have you found to be your biggest surprise since joining Cliffs?”

A. Lourenço Conçlaves: “That you wrote – not you, Lucas Pipes wrote in the report of Brean Capital that we only cut APIO costs of just $5 per ton. So I cut costs 10% and you write in the report that it was just $5. It’s very insulting. That was the biggest surprise I had.”

Q. Fred Hathmire: “Okay. Well thank you very much.”

A. Lourenço Gonçalves: “You are very welcome. Thank you very such for joining me on the call. This is just my first call here at Cliffs and in a little more than one week I’ll complete my first three months on the job. I’m giving myself an A+ in my 90-day plan, and we plan to continue to work very hard to reward the long-term shareholders. I wish you all a great quarter and we’ll talk again soon. All the best. Bye now.”

You can listen to some of the conference call here.


Roger is the Founder and Chief Investment Officer of Montgomery Investment Management. Roger brings more than two decades of investment and financial market experience, knowledge and relationships to bear in his role as Chief Investment Officer. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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  1. You know why guys like these check their blackberry’s furiously when they get off the plane.

    They’re just waiting for the moment that the board finally figures out that what he’s been saying is full of crap, and they send him an email telling him he has been fired.

  2. That’s pretty funny Roger thanks for posting,

    I just wonder whether he would’ve responded in the same manner if he received the following question.

    Tell me why do you think you deserve your salary, by the way my name is Carl Icahn?

    • Or just simply asking him to tell us about all the good things that he has done since starting at the company. I bet he would quite happily give a long and detailed answer regarding that probably with little sarcasm as well.

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