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GATHERINGINVESTMENT INFORMATION
CHAPTER TWELVE
Practical Investment Management
Robert A. Strong
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
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
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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.
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Categories of Investment Information
Insert Figure 12-1 here.
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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.
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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
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Mergent / Moody’s Publications - detailed manuals- weekly dividend record- bond record- quarterly handbook of common stock
Resources at the Library
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Company Information
Annual reports contain corporatestatements about the results of the previous year as well as the prospects for the future.
Numerous audited publications are required for publicly traded firms.
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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 theintended transaction, e.g. issue of new debt securities
Company Information
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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
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Value Line Investment Survey
Insert Figure 12-9 here.
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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.
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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
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Screening Services
- Value Line Investment Survey for Windows
- Compustat
- CRSP tapes
- Academic Search Premier
- Info Trac
- Disclosure
Screening services use staticdatabases with periodic updates.
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Investment Seminars
Local brokerage firms often hold educationalseminars 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.
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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 © 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