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Are annual reports serving the purpose ?

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reportics
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Are annual reports serving the purpose ?  Reply with quote  

To the all financial wizards here - I started reading financial reports to get a good understanding of the direction of the stock. But soon I realized it makes me consume too much of coffee as it is too long , bulky and full of jargon. So I searched for summaries of 10-K reports that I can look at quickly but couldn't find much, especially for small and mid cap .
Are you experienced investors comfortable with reading the reports , or you would like to see a solution to this problem as well? I am working on summarized annual reports , and if you guys think it makes sense too , please share your thoughts here. Would love to understand if this problem is worth solving.

Thanks,
S.T.
Post Wed Jul 12, 2017 6:14 pm
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oldguy
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Forty, or maybe 50 years ago, when I did quite a bit of trading, I subscribed to Moody's. It was a thick book, maybe 2 inches thick. Each of the approx 7000 listed stocks was given one page - a chart plus a few pertinent paragraphs about the company.
It provided a much more succinct story of the company than a 10-K report (which is often 50 pages or more).
I would guess that a print-version is obsolete - but maybe you can register on Moodys and buy digital versions?

In practice a 10-K is mostly useless - the SEC requires it as a psuedo-regulation - it is mostly computer generated year-upon-year by low-level employees, scanned & initialed by mid-managers, and passed to an officer of the company for signature. Ie, a 'made-for-government' document, carefully screened to avoid having any actual content (Maybe I'm too cynical?)

Given that the 10-K is mostly useless, a summarized version would probably be even more useless?
Post Wed Jul 12, 2017 10:55 pm
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reportics
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I believe annual report or 10-K would still be relevant as it gives a detailed view of the stock / company. Though I agree the print version is surely absolute. Digital version should serve the purpose.
I did search if Moody / Edgar / SEC offer any such service but I could not find any. So I thought of creating one such service myself. I started doing some base work at fincubes.com , but I want to know from others if this is a problem of many - worth solving or not !
Feel free to drop in email ids if interested ! Looking forward to any feedback / suggestions.
Post Thu Jul 13, 2017 4:58 pm
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oldguy
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quote:
I started doing some base work at fincubes.com , but I want to know from others if this is a problem of many - worth solving or not !


10-K's provide factual data about the company's financial status/strengths/weaknesses.

But the stock price is really determined by the fickle feelings of the public.
Eg, a company may have a great balance sheet, good prospects, good earnings. But the media may report pesticides/herbicides, GMO, immigrant labor, born-again christians, discriminate against LGBTs, hate/love guns, and so on. Those things have way more affect on the price of a stock than the business stats.

Your software would need to factor in the whims of public opinion to be of any use to a trader - and traders know that. They also know that you cannot predict the future screw-ups of the media news.

Many traders pick stocks randomly, based on the 50/50 probability of a stock going up. And then they limit the downside with a mechanically-derived sell order. And never second-guess themselves, they let the sell-orders trigger no matter what.
Post Thu Jul 13, 2017 5:31 pm
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