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GATHERING INVESTMENT INFORMATION

GATHERING INVESTMENT INFORMATION. CHAPTER TWELVE. 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

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GATHERING INVESTMENT INFORMATION

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  1. GATHERINGINVESTMENT INFORMATION CHAPTER TWELVE Practical Investment Management Robert A. Strong

  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. 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. 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 Insert Figure 12-1 here.

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

  7. 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

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

  9. Numerous audited publications are required for publicly traded firms. Company Information • Annual reports contain corporate statements about the results of the previous year as well as the prospects for the future.

  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) Company Information • The prospectus outlines the terms of the intended transaction, e.g. issue of new debt securities

  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. Value Line Investment Survey Insert Figure 12-9 here.

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

  14. 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 investment-related firms and organizations can be found on the Internet.

  15. Screening services use static databases with periodic updates. Screening Services - Value Line Investment Survey for Windows - Compustat - CRSP tapes - Academic Search Premier - Info Trac - Disclosure

  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. 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. 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

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