There can be no better piece of information about a company than annual reports. It may look like a collection of pages that companies send at the end of the year. Reading it may seem to be a time-consuming and boring job. However, it is a very valuable piece of information about a particular company.
In the annual report, the company’s management discusses the important aspects of the company like industry performance, its vision for the long term, opportunities and threats faced by the company, the company’s historical performance, etc.
Jim Rogers, one of the finest and most successful investors on Wall Street believes the same when it comes to reading the company’s annual report.
When someone asked Jim Rogers about the best piece of advice he ever got, he said it was the one he received from an old man on an airplane and the advice was “Read everything”.
Jim Rogers talks about how you can set an edge on the vast majority of people on wall street if you simply read everything you can on a prospective investment.
“If you get interested in a company and you read the annual reports, he said you will have done more than 98% of the people on Wall Street.
And if you read the footnotes in the annual report, you will have done more than 100% of the people on Wall Street.
I realized right away that if I just literally read a company’s annual report and the notes – or better yet, 4-5 years of the report – I would know much more than other investors out there” said Jim Rogers.
Some of the important things which we need to focus on while reading the annual report included in this podcast.