1. CHAPTER TEN GATHERING INVESTMENT INFORMATION © 2001 South-Western College Publishing

2. 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. 3 Outline  Investment Letters  Advisory Letters  The Popular Press  Computer Services  Screening Services  On-Line Computer Services  Seminars  Brokerage Firms  Bank Trust Departments  Employee Relation Programs  Exchange Seminars

4. 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. Categories of Investment Information 5 Standard & Poor’s Mergent / Moody’s Library Reference Material Annual Reports SEC Submissions Prospectus Company Material Advisory Popular Press Investment Services Screening On-Line Data Computer Services Brokerage Firms Bank Trust Departments Employee Relations Exchange Seminars

6. 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. 7  Standard & Poor’s Publications - monthly stock guide - quarterly company stock report - bond guide - weekly Outlook (with highlights, summary opinions and statistics) - stock market encyclopedia (S&P 500 stock reports) - earnings forecaster (compilation of estimates) - annual corporation records with daily updates Resources at the Library

8. 8  Mergent / Moody’s Publications - detailed manuals - weekly dividend record - bond record - quarterly handbook of common stock Resources at the Library

9. 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. 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. 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 Broker’s Estimate Survey (I/B/E/S) - Zack’s Corporate Earnings Estimator - research information from brokerage firms

12. 12 Investment Letters - The Wall Street Journal - Barron’s (weekly) - Investors Daily - Forbes (twice monthly) - Smart Money - other magazines - television programs  The popular press offer more general information, although recommended investor behavior may still be suggested.

13. 13 Computer Services - Value Line Investment Survey for Windows - Compustat - CRSP tapes - Expanded Academic Index - Disclosure  Screening services use static databases with periodic updates.

14. 14 Computer Services - CompuServe, Yahoo! and America On-Line - Dow Jones News Retrieval System - the Internet e.g. the U.S. government’s EDGAR database, the Wall Street Journal internet site  On-line computer services are dynamic with continuous updates.

15. 15 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 education sessions too.

16. 16 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

17. 17 Review  Investment Letters  Advisory Letters  The Popular Press  Computer Services  Screening Services  On-Line Computer Services  Seminars  Brokerage Firms  Bank Trust Departments  Employee Relation Programs  Exchange Seminars