Curious how people approach this in general, and that's what sparked my post here. Do you read through 10-Ks and quarterly reports before pulling the trigger, or do you mostly go off news, gut feeling, and general sentiment? And if you do read them, do you find it straightforward or is there a learning curve? I've found it quite slow as I had to stop to look up terminology I wasn't familiar with especially since it seems different sectors sometimes have different terminology or things to focus on.
How many of you go through financial statements of companies you are looking to invest in?
byu/Emotional_Ladder3460 ininvesting
Posted by Emotional_Ladder3460
10 Comments
I read them 3 times over. 10Ks, 10Qs, and the notes.
My little experience has taught me never ever ever focus on guts even for the most certain things.
For reputable brands, I just double check the last Ks and Qs. Anything else, it is thorough analysis.
Ps: The more you do it as an exercise the easier it becomes.
You can also buy a few shares on guts feeling and then proceed with the thorough research. It helps with the skin in the Game urgency.
No. Once you realize stock movement has diverged from those kinds of things you can get a better idea of how the market moves.
Unless you’re a deep value investor (which, unless you’re also a grumpy 70-year old man, you probably aren’t) there’s no reason to actually go through financial statements now thanks to AI chatbots. You just have to learn enough to know which questions to ask to get the right takeaways.
I don’t read every line unless I’m seriously considering a position.
Usually I skim the 10-K first. Business overview, risk factors, cash flow statement, and then I’ll dig into the notes if something looks off. The MD&A section is actually more useful than people think.
Quarterlies I treat more as updates than deep dives.
There’s definitely a learning curve, especially across sectors. But after a few reads you start recognizing the patterns and what actually matters vs filler.
If I’m just buying broad ETFs though, I don’t bother.
The only thing I look at when Im thinking about investing in a company is how the chart looks, literally dont give a shit about anything else. News follows price.
I do for the private investments I do. P&Ls, investor statements, etc.
For my publicly traded stuff I do broader mutual funds/ETFs so I don’t get into the weeds on those .
Its vibes man.
All vibes.
Always has been.
I do compare the big numbers when looking for new positions in sectors I’m less familiar with, but that’s really rare. I also compare them if I’m looking for a reason to exit a position permanently, which is also very rare.
Honestly, I don’t read full 10-Ks unless it’s a large position. I usually look at summary financials, earnings presentations, and maybe the MD&A section. Full reports are dense and time-consuming, so I focus on the key metrics that matter for that sector.
Wouldn’t understand them, so never.