CHAPTER TEN
GATHERING
INVESTMENT INFORMATION
© 2001 South-Western College Publishing
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

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

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.
4
Categories of Investment Information
Library
Reference
Material
Company
Material
Investment
Services
Standard
& Poor’s
Annual
Reports
Advisory
Screening
Mergent /
Moody’s
SEC
Popular
Press
On-Line
Data
Submissions
Prospectus
Computer
Services
Seminars
Brokerage
Firms
Bank Trust
Departments
Employee
Relations
Exchange
Seminars
5
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.
6
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 encyclopedia
(S&P 500 stock reports)
- earnings forecaster
(compilation of estimates)
- annual corporation records with
daily updates
7
Resources at the Library

Mergent / Moody’s Publications
- detailed manuals
- weekly dividend record
- bond record
- quarterly handbook of common stock
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.
9
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
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
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
12
Computer Services

Screening services use static
databases with periodic
updates.
- Value Line Investment Survey for Windows
- Compustat
- CRSP tapes
- Expanded Academic Index
- Disclosure
13
Computer Services

On-line computer services are
dynamic with continuous
updates.
- CompuServe, Yahoo! and America On-Line
- Dow Jones News Retrieval System
- the Internet
e.g. the U.S. government’s EDGAR database,
the Wall Street Journal internet site
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.
15
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

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

17