Michelle Leder is the founder and editor of www.footnoted.com and the author of “Financial Fine Print: Uncovering a Company’s True Value” (John Wiley & Sons, 2003).


Discussion

J from PA posted over 3 years ago:

Thanks for the interview. Good food for thought


Robert from VA posted over 3 years ago:

Very helpful article, I think that I have a new found respect for SEC filings. I am going to do a bit of research on the companies that I have stock investments in and see just how they stack up. One other comment, about Krispy Kreme, I had looked at buying their stock, but I just couldn't see the stock at the price that it was going to in relation to the amount that they were charging for a box of glazed doughnuts. It just didn't seem that there was enough volume there for me, so I bowed out.


Cliff from NH posted over 3 years ago:

outstanding article...it's always about "buyer beware". You can't know too much about the company you entrust your money to.


Richard from OR posted over 3 years ago:

Excellent article. I would have liked to see more specific examples of things to look for in the SEC filings but, after reading this I will read the 10-K more carefully.


Steven from TX posted over 3 years ago:

yes, I agree, very good article. I liked the fact you brought up Krispy Kreme. I do not understand how a company can falsify accounting like they did. Then go chapter 11 when caught, take all your money, and back to business as nothing happen. Steve


Nolan from OK posted over 3 years ago:

I WOULD LIKE TO SEE MORE SPECIFIC EXAMPLES. THE ARTICLE IS TOO GENERAL WHICH DOESN'T HELP VERY MUCH. THAT IS THE TROUBLE WITH MOST INVESTMENT E-LETTERS AND ARTICLES THEY SEEM TO THINK THEY WILL TELL ONE OF THEIR SECRETS IF THEY GIVE SPECIFICS


James from PA posted over 3 years ago:

I agree with the comment that this article is too general and not of much value. I read 10K's and have trouble really understanding what they say.


Steven from IA posted over 3 years ago:

Amen to James who says this is not simple or easy. I remember one corporation sending me a flow chart of operations that I thought was more complicated than a television schematic. I bought a textbook that made an example of a balance sheet and such of a child's hot dog stand. Simple, yes. Now go try to figure out Citigroup or IBM!!!


Steven from IA posted over 3 years ago:

I just wanted to add - Of course it is successful analysis is very difficult. If it was easy so anyone could do it then "How to get Rich in the Stock Market" would be taught in junior high and no one would go to high school. No one would work for a living because we all would be billionaires in mansions. I have taken some comfort lately in ETFs and accepting that I cannot see into the future or outwit professional corporate accountants


Michelle Leder from NY posted over 3 years ago:

If every company were exactly the same, I could easily provide specific examples of what to look for each and every time. But since that's not the case, I tried to be more general and explain some of the things the people need to be looking for. At some companies, it may be aggressive accounting, at others, it could be subtle changes to risk factors, and still others could have legal issues that are worth paying close attention to.

Like it or not, reading filings is very much an art, as opposed to a science, so coming up with an exact formula that you can follow every single time is simply not possible here.

I've been reading filings closely for close to a decade now and there's still things that surprise me every single time.

Michelle Leder


Bob from Michigan posted over 3 years ago:

Taking college accounting (2 semesters) and corporate finance really helped me in understanding company financial reports even though I didn't complete requirements for a BA degree.


Mike from CA posted over 3 years ago:

One of my interests in SEC filings is executive compensation. I own some shares of CEP and noticed that the executives had recently added a very generous compensation payout if the shares stayed above $3.50 for over 20 days between now and the end of 2012 or 2013. I couldn't remember which. It appears to be a pretty easy target to hit (too easy for my taste) so I figured at $2.25 it was worth buying and holding until at least that point. I'll look at it more carefully if it gets into that 20 day period I mentioned.

I'm not pushing the stock, (it may be crap) I'm just saying I'm making a small bet on the greed of management in a company I happen to have a few shares in.

Betting on executive greed in this day and age is rarely a losing proposition.


Joseph from KS posted over 2 years ago:

The article dosen't help much.It is a good general over view of the need to check the required reports. I doubt many of the highpayed CEOs could justify their salaries.It looks to me that there is a real back scratching between the CEOs and the boards of directors.


Tim from AL posted over 2 years ago:

I have been had by a number of companie's by not paying close attention to there reports.

There is also some outright misleading things
that come from analyst.

Tim


Dominick from WA posted over 2 years ago:

Enjoyed the article's analysis.

What does the author feel about free cash flow as a better potential indicator of company profit and value? Is it less easily manipulated than earnings or just as easily manipulated?

Curious to hear Michelle's thoughts on this. For me, I prefer to look at cash flow more-so than earnings.

Dom


Judy from NC posted over 2 years ago:

Thanks for a great article for us beginners. I especially learned (became aware) of the various report listings for both domestic and foreign companies.

I think most investors rely on stock pickers and ideas from the informed and did not realize that even some of them may not do their due diligence.

I got burned on holding ccj (uranium stock) when Japan's woes turned it up-side down. Yes, i really thougt after a month or so the stock would return to its highs so i held on to it. The unexpected thing, however, was that the various nations world-wide turned chicken and dropped nuclear plans. But after closing in near a full year; it looks like nuclear is back in or will slowly return to an up stock. I'm still holding but it has been a long year watching it do nothing. With time it should return my money back; but then i may just hold on to it longer after it gets going again.


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