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shamapant (80.82)

How do you read annual reports?

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September 22, 2012 – Comments (4)

How do you guys read annual reports? I used to usually read them on my computer screen, but I feel very detached from the reading. I was researching DWA and I finally just printed their MD&A section on 8pgs(back and front) and it's a MUCH more useful experience to me. Just looking for what your research habits are. 

 A recent major influence on me in terms of researching investments is the book Value Investing: From Graham to Buffett and Beyond...fantastic book for value investors(obviously) but it really changed my thinking and (blasphemy alert!) I found it much more enlightening than The Intelligent Investor(although the concepts in the Intelligent Investor are absolutely central, and Jason Zweig's commentary version is very nice).

 

Also, I recently decided I wouldn't pick a stock on CAPS unless I either thoroughly researched it as a potential investment or actually bought in. I've cut down my picks to 7 now...I'm really going to have to expand my portfolio. 

4 Comments – Post Your Own

#1) On September 22, 2012 at 12:29 PM, Teacherman1 (62.39) wrote:

Good morning Nikhil

Wow! You really "culled" your picks. Look forward to seeing your new additions as they arrive.

As for reading annual reports, I read them online, but since I also own all of my picks, I get a copy of the annual report sent to me by my broker. The "booklet" form has a lot more information and allows you to pick and choose what you want to look at and often contains information that you would not always see or notice when looking online.

Of course, there are many other factors that go into making investment decisions other than the annual report, but that is the heart of my research.

Good luck with your continued investing career.

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#2) On September 22, 2012 at 1:33 PM, HarryCarysGhost (99.75) wrote:

Ok my response is going to be somewhat gross, but it's the truth so here goes.

I also get copies of annual reports sent to me by mail, and I read them while perched upon the throne. Some people have magazine racks in the bathroom. I have an annual report library.

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#3) On September 24, 2012 at 3:59 PM, TSIF (99.96) wrote:

They don't give you constipation harrycarysghost?  In the "old days" you could have gotten double use out of them when you were done reading them.....if they are not too glossy they also work well in the fireplace.

I print them, (if not delivered via mail) if they are companies that may have some extra details and charts.  Miners and small caps in particular generally get a pretty though review. If they are long established companies, then I just skim them, and online is fiine.  If they are large cap, then I ignore them.... the "anal"ysts generally ask the tough questions at the quarterlies....yeah right....  ;)

Of course an annual report is only as reliable as the company publishing it.....

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#4) On September 24, 2012 at 4:27 PM, EnigmaDude (98.06) wrote:

Annual reports are so 20th century!  I just read CAPS players comments and go from there!  :)

But seriously, the only reason to really study an annual report is if you intend to invest in a company for the long term (at least 5-10 years or more) since the data is already stale by the time they print it.  When I do read an annual report I prefer the printed version (also very 20th century!)

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