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

2. South-Western / Thomson Learning © 2004 12 - 2 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

3. South-Western / Thomson Learning © 2004 12 - 3 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

4. South-Western / Thomson Learning © 2004 12 - 4 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.

5. South-Western / Thomson Learning © 2004 12 - 5 Categories of Investment Information Insert Figure 12-1 here.

6. South-Western / Thomson Learning © 2004 12 - 6 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.

7. South-Western / Thomson Learning © 2004 12 - 7  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

8. South-Western / Thomson Learning © 2004 12 - 8  Mergent / Moody’s Publications - detailed manuals - weekly dividend record - bond record - quarterly handbook of common stock Resources at the Library

9. South-Western / Thomson Learning © 2004 12 - 9 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.

10. South-Western / Thomson Learning © 2004 12 - 10  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

11. South-Western / Thomson Learning © 2004 12 - 11 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

12. South-Western / Thomson Learning © 2004 12 - 12 Value Line Investment Survey Insert Figure 12-9 here.

13. South-Western / Thomson Learning © 2004 12 - 13 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.

14. South-Western / Thomson Learning © 2004 12 - 14  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

15. South-Western / Thomson Learning © 2004 12 - 15 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.

16. South-Western / Thomson Learning © 2004 12 - 16 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.

17. South-Western / Thomson Learning © 2004 12 - 17 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

18. South-Western / Thomson Learning © 2004 12 - 18  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