Product Description
Thirty-five million individual investors jumped into the stock market for the first time during the late 1990s without asking questions about the stocks they were buying. When the bubble burst and the large number of accounting scandals began to grow, most investors didn’t know where to turn or whom to trust. Now it has become more important than ever for investors to take matters into their own hands. Financial Fine Print: Uncovering a Company’s True Value lets individual investors in on the secrets that seasoned professional investors use when they evaluate a potential investment. Buried deep in a company’s quarterly (10-Q) and annual (10-K) reports are the real clues to a company’s financial health: the footnotes. At many large companies, these footnotes can run for more than 30 pages and for some corporations have doubled in the past five years, making them simply too important for investors to ignore.
Financial Fine Print spells out exactly what investors need to look for within the footnotes of a company’s reports in order to make better, more informed decisions. By using numerous examples of actual footnotes that have appeared in SEC documents, the book teaches investors in easy-to-understand language ways to spot – and avoid – future Enrons and Worldcoms (and Tycos and Adelphias and HealthSouths). For any investor who has spent the past three years watching their investments shrink and has begun to think about getting back into the market, this book provides the critical tools that investors need to know to avoid getting burned once again.
Average Customer Review:
1 of 1 people found the following review helpful:
Needs less talk, more action!, 2007-07-24
As an investor and equity columnist, I often use 10-K's and 10-Q's to form an opinion on the financial health of companies. I bought Financial Fine Print with the hope it would improve my analyses by helping me tune in on the most important figures and red flags.
Much to my disappointment, this book provided very little help. Many of the chapters were filled with "fluff," discussing trivial details about the history of SEC regulation and not getting to the main points. After reading through entire chapters, only a few (sometimes obvious) financial red flags were covered.
A major problem is that the author does not distinguish between financial chicanery and benign transactions. Particularly the chapters on CEO perks and off-balance sheet entities leave the reader more cognizant of such items, but without any clue how to react to them. Not every company with an off-balance sheet arrangement is on the brink of an Enron-like crisis, but the author might lead you to assume so. With so many references to Enron and Quest, the entire book seems to be written to cash in on their collapse.
I'm not sure what audience this book was written for, whether the author was targeting uninformed home gamers or investors with intermediate/advanced stock market knowledge. It seems to be aimed towards the murky middle of both crowds.
The bottom line is that this book might carry some merit for retail investors just getting their feet wet when it comes to 10-K's. Some of the information may be handy depending on your knowledge level. This is one of those books that you will either love it or hate it.
2 of 2 people found the following review helpful:
Excellent primer for beginners, 2006-10-11
Financial Fine Print is very good for someone new to analyzing financial statements. It is clear and not extremely technical. However, for most practitioners, you probably already know everything in this book already as notes to the financial statements are usually covered in accounting classes taken in college or in training at a financial firm.
3 of 5 people found the following review helpful:
Protect yourself against future losses, 2006-10-01
A thoroughly enlightening and enjoyable book. Read it and you will lower the chances of losing money due to white collar crimes in the future. The example footnotes serve as guidelines for what to watch out for in a report.
I would also highly recommend regular visits to the author's blog at [...]
As a companion book, I suggest "It's earnings that count" by Hewitt Heiserman.
8 of 10 people found the following review helpful:
Engaging but lacking in specifics, 2004-12-30
Very well written and a good read as far as financial books go. Focus is on investing time and effort in analyzing footnotes in 10K and 10Q statements, a much underappreciated aspect of finding good values and avoiding value pitfalls.
Although this book does great work in stressing the importance of this subject and works as an important motivator, it does not provide lay investor with any new tools or statistical guidelines to uncover a company's value.
7 of 11 people found the following review helpful:
Highly Recommended, 2004-03-23
Hard to believe that a financial how-to-book like this would be a page
turner. But, I thoroughly enjoyed this easy-to-read, timely and well
written book. Leder's tactics and strategies for lay investors are
invaluable. She provides the insight and perspective of a professional
analyst.
"Bottom Line" a book well worth the investment.