I find it unbelievable to a point of dejection how many people only look at the statements (balance sheet, P&L and cash flow) and discard the rest of Annual Report. I sincerely wish these people read the Annual report in detail (that leaves just a few) with concentration, eyes peeled (Hah! that leaves no one except for John Hempton). I am not demanding a Philip Fisher-type depth, just a bare reading will suffice!
- The Annual report is a detailed communication that company makes with you. No meeting can cover these many issues in that depth.
- Most often, there is lot left unsaid in the report. But what is said is no less important. Please read it at least. I can forgive you if you don't understand what is written, but not reading is not an excuse.
- Many times we don't get picture of how divisions are performing, which products are losing money etc. But use what is given construct a picture of that what you cannot see. Remember Annual report has legal weight.
- Further, quite a few companies are open about information sharing if you just care to read.
To me, the analyst who does not have capacity to read is no analyst. The investor who does not want to read is far more dangerous and bunch of investors who don't read are simply today's market participants.