CHAPTER TEN
GATHERING
INVESTMENT INFORMATION
Practical Investment Management
Robert A. Strong
Outline

Research Philosophy
Know Thyself
 Screening


Resources at the Library
Standard & Poor’s Publications
 Moody’s Publications


Company Information
Annual Reports
 SEC Filings
 The Prospectus

South-Western College Publishing ©1998
2
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

South-Western College Publishing ©1998
3
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 College Publishing ©1998
4
Categories of Investment Information
Library
Reference
Material
Company
Material
Investment
Services
Standard
& Poor’s
Annual
Reports
Advisory
Screening
Moody’s
SEC
Popular
Press
On-Line
Data
Submissions
Prospectus
Computer
Services
Seminars
Brokerage
Firms
Bank Trust
Departments
Employee
Relations
Exchange
Seminars
South-Western College Publishing ©1998
5
Resources at the Library
Standard & Poor’s and Moody’s
publish easy-to-use reference
material that can be found in most
public libraries.
South-Western College Publishing ©1998
6
Resources at the Library

Standard & Poor’s Publications
- monthly stock guide
- quarterly company stock report
- monthly 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
South-Western College Publishing ©1998
7
Resources at the Library

Moody’s Publications
- detailed manuals
- weekly dividend record
- bond record
- weekly bond survey
- quarterly handbook of common stock
South-Western College Publishing ©1998
8
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 College Publishing ©1998
9
Company Information


SEC filings
- 10-K report (annual report)
- 10-Q report (quarterly report)
The prospectus outlines the terms of the
intended transaction, e.g. issue of new
debt securities
South-Western College Publishing ©1998
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 Broker’s Estimate Survey
(I/B/E/S)
- Zack’s Corporate Earnings Estimator
- research information from brokerage
firms
South-Western College Publishing ©1998
11
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 Daily
- Forbes (twice monthly)
- Smart Money
- other magazines
- television programs
South-Western College Publishing ©1998
12
Computer Services

Screening services use static
databases with periodic
updates.
- Value Screen III
- Morningstar U.S. Equities on Floppy
- Compustat
- CRISP tapes
- Standard & Poor’s Stockpak
- Expanded Academic Index
- Disclosure
South-Western College Publishing ©1998
13
Computer Services

On-line computer services are
dynamic with continuous
updates.
- CompuServe, Prodigy, and America On-Line
- Dow Jones News Retrieval System
- S&P Online
- the Internet
e.g. the U.S. government’s EDGAR database
South-Western College Publishing ©1998
14
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.
South-Western College Publishing ©1998
15
Review

Research Philosophy
Know Thyself
 Screening


Resources at the Library
Standard & Poor’s Publications
 Moody’s Publications


Company Information
Annual Reports
 SEC Filings
 The Prospectus

South-Western College Publishing ©1998
16
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

South-Western College Publishing ©1998
17