GATHERING INVESTMENT INFORMATION CHAPTER TWELVE Practical Investment Management Robert A. Strong

South-Western / Thomson Learning © Outline  Research Philosophy  Know Thyself  Screening  Resources at the Library  Standard & Poor’s Publications  Mergent / Moody’s Publications  Company Information  Annual Reports  SEC Filings  The Prospectus

South-Western / Thomson Learning © Outline  Investment Letters  Advisory Letters  The Popular Press  Computer / Internet Services  Screening Services  Investment Seminars  Brokerage Firms  Bank Trust Departments  Employee Relation Programs  Exchange Seminars

South-Western / Thomson Learning © Research Philosophy  Before conducting any research, decide what kind of information will be useful.  Know thyself : Knowing their own attitudes toward various issues can be a big help in allowing investors to make productive use of their research time. E.g. fundamental analysis, technical analysis, the experts’ approach.  Screening is the process of sorting through the list of potential investments.

South-Western / Thomson Learning © Categories of Investment Information Insert Figure 12-1 here.

South-Western / Thomson Learning © Resources at the Library Standard & Poor’s and Mergent / Moody’s publish easy-to-use reference material that can be found in most public libraries.

South-Western / Thomson Learning ©  Standard & Poor’s Publications - monthly stock guide - quarterly company stock report - bond guide - weekly Outlook (with highlights, summary opinions and statistics) - stock market guide (S&P 500 stock reports) - earnings forecaster (compilation of estimates) - annual corporation records with daily updates Resources at the Library

South-Western / Thomson Learning ©  Mergent / Moody’s Publications - detailed manuals - weekly dividend record - bond record - quarterly handbook of common stock Resources at the Library

South-Western / Thomson Learning © Company Information  Annual reports contain corporate statements about the results of the previous year as well as the prospects for the future. Numerous audited publications are required for publicly traded firms.

South-Western / Thomson Learning ©  SEC filings - 10-K report (annual report) - 10-Q report (quarterly report) - Schedule 14A (proxy statement) - Form 144 (insider’s “intent to sell” document)  The prospectus outlines the terms of the intended transaction, e.g. issue of new debt securities Company Information

South-Western / Thomson Learning © Investment Letters Investors often consider publications that make investment recommendations or forecasts.  Advisory letters offer specific investment recommendations. - Value Line Investment Survey (with timeliness and safety rankings) - Institutional Brokers Estimate System (I/B/E/S) and First Call - Zack’s Investment Research - research information from brokerage firms

South-Western / Thomson Learning © Value Line Investment Survey Insert Figure 12-9 here.

South-Western / Thomson Learning © Investment Letters - The Wall Street Journal - Barron’s (weekly) - Investors Business Daily - Forbes (twice monthly) - Smart Money - other magazines  The popular press offer more general information, although recommended investor behavior may still be suggested.

South-Western / Thomson Learning ©  One group of computer services is static databases with periodic updates, used primarily for security screening.  Another group is dynamic with continuous updates, used for augmenting the results of other security selection activities.  Many databases and the home pages of many listed companies and investment- related firms and organizations can be found on the Internet. Computer / Internet Services

South-Western / Thomson Learning © Screening Services - Value Line Investment Survey for Windows - Compustat - CRSP tapes - Academic Search Premier - Info Trac - Disclosure  Screening services use static databases with periodic updates.

South-Western / Thomson Learning © Investment Seminars  Local brokerage firms often hold educational seminars for their current and prospective customers.  Bank trust departments also hold seminars.  Some employee relation programs provide investment information to boost employee morale.  The securities exchanges offer educational sessions too.

South-Western / Thomson Learning © Review  Research Philosophy  Know Thyself  Screening  Resources at the Library  Standard & Poor’s Publications  Mergent / Moody’s Publications  Company Information  Annual Reports  SEC Filings  The Prospectus

South-Western / Thomson Learning ©  Investment Letters  Advisory Letters  The Popular Press  Computer / Internet Services  Screening Services  Investment Seminars  Brokerage Firms  Bank Trust Departments  Employee Relation Programs  Exchange Seminars Review