CHAPTER TWELVE GATHERING INVESTMENT INFORMATION Practical Investment Management Robert A Strong 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 - 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 © 2004 12 - 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 © 2004 12 - Categories of Investment Information Insert Figure 12-1 here South-Western / Thomson Learning © 2004 12 - 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 © 2004 12 - Resources at the Library 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 South-Western / Thomson Learning © 2004 12 - Resources at the Library Mergent / Moody’s Publications - detailed manuals - weekly dividend record - bond record - quarterly handbook of common stock South-Western / Thomson Learning © 2004 12 - Company Information Numerous audited publications are required for publicly traded firms Annual reports contain corporate statements about the results of the previous year as well as the prospects for the future South-Western / Thomson Learning © 2004 12 - Company Information 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 South-Western / Thomson Learning © 2004 12 - 10 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 © 2004 12 - 11 Value Line Investment Survey Insert Figure 12-9 here South-Western / Thomson Learning © 2004 12 - 12 Investment Letters The popular press offer more general information, although recommended investor behavior may still be suggested - The Wall Street Journal - Barron’s (weekly) - Investors Business Daily - Forbes (twice monthly) - Smart Money - other magazines South-Western / Thomson Learning © 2004 12 - 13 Computer / Internet Services 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 investmentrelated firms and organizations can be found on the Internet South-Western / Thomson Learning © 2004 12 - 14 Screening Services Screening services use static databases with periodic updates - Value Line Investment Survey for Windows - Compustat - CRSP tapes - Academic Search Premier - Info Trac - Disclosure South-Western / Thomson Learning © 2004 12 - 15 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 © 2004 12 - 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 South-Western / Thomson Learning © 2004 12 - 17 Review 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 © 2004 12 - 18 ... - 10 Investment Letters Investors often consider publications that make investment recommendations or forecasts Advisory letters offer specific investment recommendations - Value Line Investment. .. Screening is the process of sorting through the list of potential investments South-Western / Thomson Learning © 2004 12 - Categories of Investment Information Insert Figure 12-1 here South-Western... Thomson Learning © 2004 12 - Outline Investment Letters Advisory Letters The Popular Press Computer / Internet Services Screening Services Investment Seminars Brokerage Firms Bank