annual reports

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3feetpete
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annual reports

Post by 3feetpete »

Does anybody actually read the annual reports? I know they are a Federal requirement but I can't foresee any set of circumstances where an annual report would convince me to take any action, buy or sell, an index fund or ETF. If they are not actionable, then why spend the effort to read and understand them.
loghound
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Re: annual reports

Post by loghound »

Most of the time no, but I have in the past... they can honestly be pretty interesting once you know how to skim the boilerplate. I actually noticed this morning I got a notice of some Vanguard annual reports and I went in just now to skim them and, again, sort of interesting and highly readable.

Case in point. Here is the Annual report for Wellesley, the first 6 pages are a pretty easy read and even some of the details in the subsequent 60 pages have some interesting nuggets (In terms of holdings, they have bonds from Apple & Microsoft (page 32)... Critical to know? not really but interesting).

It's like reading a court ruling (which I've gotten into recently... Reading the Ruling from the Judge on high profile cases). Once you've read a few they become pretty easy (and honestly quite insightful) to read. The secret is to learn how pick out the interesting bits..
Last edited by loghound on Sat Nov 27, 2021 10:46 am, edited 1 time in total.
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jebmke
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Re: annual reports

Post by jebmke »

I do not unless I have some question in my mind that might be answered there. I do read the prospectus for new investing as well as any notices they send that announce changes to a fund.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
jaqenhghar
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Re: annual reports

Post by jaqenhghar »

loghound wrote: Sat Nov 27, 2021 10:38 am Most of the time no, but I have in the past... they can honestly be pretty interesting once you know how to skim the boilerplate. I actually noticed this morning I got a notice of some Vanguard annual reports and I went in just now to skim them and, again, sort of interesting and highly readable.

It's like reading a court ruling (which I've gotten into recently... Reading the Ruling from the Judge on high profile cases). Once you've read a few they become pretty easy (and honestly quite insightful) to read. The secret is to learn how pick out the interesting bits..
Any suggestions on how to "learn how pick out the interesting bits"? I'd love to read the reports but my eyes keep glazing over :D
loghound
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Re: annual reports

Post by loghound »

jaqenhghar wrote: Sat Nov 27, 2021 10:44 am
loghound wrote: Sat Nov 27, 2021 10:38 am Most of the time no, but I have in the past... they can honestly be pretty interesting once you know how to skim the boilerplate. I actually noticed this morning I got a notice of some Vanguard annual reports and I went in just now to skim them and, again, sort of interesting and highly readable.

It's like reading a court ruling (which I've gotten into recently... Reading the Ruling from the Judge on high profile cases). Once you've read a few they become pretty easy (and honestly quite insightful) to read. The secret is to learn how pick out the interesting bits..
Any suggestions on how to "learn how pick out the interesting bits"? I'd love to read the reports but my eyes keep glazing over :D
Nothing specific except you have to read a few and you'll figure it out. Generally, I read the first few pages where they talk about their strategy (and any changes), performance against benchmarks, risks and trends... that stuff is pretty good. Once you get past the first 4-10 pages it often becomes a lot of data that is a bit harder to get excited about reading.....
I would have written a shorter letter, but I did not have the time. | - Blaise Pascal
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abuss368
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Re: annual reports

Post by abuss368 »

3feetpete wrote: Sat Nov 27, 2021 10:20 am Does anybody actually read the annual reports? I know they are a Federal requirement but I can't foresee any set of circumstances where an annual report would convince me to take any action, buy or sell, an index fund or ETF. If they are not actionable, then why spend the effort to read and understand them.
Hi 3feetpete -

Many years back I traded only individual stocks. At one point I had over 80 positions. During those days of paper, I would have stacks of annual reports, dial in to conference calls, and vote with the proxies.

Little did I realize it was meaningless. EXCEPT I learned tons so in many respects it was an investment in education.

We then moved to Vanguard. Old habits dying hard motivated me to read fund reports. I learned a little but at one point stopped cold. I figured anything meaningful would be in the news. I have not read an annual report in many years. While it has not made any difference in our investing, it has made a difference to free up time for other endeavors.

Best.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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abuss368
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Re: annual reports

Post by abuss368 »

loghound wrote: Sat Nov 27, 2021 10:49 am
jaqenhghar wrote: Sat Nov 27, 2021 10:44 am
loghound wrote: Sat Nov 27, 2021 10:38 am Most of the time no, but I have in the past... they can honestly be pretty interesting once you know how to skim the boilerplate. I actually noticed this morning I got a notice of some Vanguard annual reports and I went in just now to skim them and, again, sort of interesting and highly readable.

It's like reading a court ruling (which I've gotten into recently... Reading the Ruling from the Judge on high profile cases). Once you've read a few they become pretty easy (and honestly quite insightful) to read. The secret is to learn how pick out the interesting bits..
Any suggestions on how to "learn how pick out the interesting bits"? I'd love to read the reports but my eyes keep glazing over :D
Nothing specific except you have to read a few and you'll figure it out. Generally, I read the first few pages where they talk about their strategy (and any changes), performance against benchmarks, risks and trends... that stuff is pretty good. Once you get past the first 4-10 pages it often becomes a lot of data that is a bit harder to get excited about reading.....
Vanguard fund reports used to provide a Chairman’s letter with Jack Brennan and Bill McNabb’s thoughts. I enjoyed reading those few pages but they moved away form that format.

Best.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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arcticpineapplecorp.
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Re: annual reports

Post by arcticpineapplecorp. »

i have read them on occasion to see what percentage a certain company makes up of the total world stock market index and happily shared that info as was done here:

viewtopic.php?p=6337109#p6337109
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alex_686
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Re: annual reports

Post by alex_686 »

Rarely, and I used to write them for funds.

The more unique and specific the situation is the more likely I am to read.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
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AnnetteLouisan
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Re: annual reports

Post by AnnetteLouisan »

alex_686 wrote: Sat Nov 27, 2021 11:01 am Rarely, and I used to write them for funds.

The more unique and specific the situation is the more likely I am to read.
+1
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JoeRetire
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Re: annual reports

Post by JoeRetire »

3feetpete wrote: Sat Nov 27, 2021 10:20 am Does anybody actually read the annual reports? I know they are a Federal requirement but I can't foresee any set of circumstances where an annual report would convince me to take any action, buy or sell, an index fund or ETF. If they are not actionable, then why spend the effort to read and understand them.
I never have. I don't know anyone who ever has.
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Karamatsu
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Re: annual reports

Post by Karamatsu »

With individual companies and some off-the-wall things (especially closed-end funds), the reports can be very interesting, even wild, full of aspirations/excuses and strategy (the early section), followed by the facts (the numbers and, crucially, the notes). But with large, mainstream index funds... they're kind of boring. I mean, they follow an index, so as long as they follow the index, the share price is what it is. No doubt there is accounting strategy involved in running a profitable fund just as there is strategy in running any profitable business, but somehow they just doesn't grab me the way a company trying to survive by offering goods and services does.

But now that you mention it, they do have all my money, so it would be negligent not to follow what they're up to.

Also, of course, they are actionable in the sense that you get to decide whether to keep your money with them or not. As you might expect, greed is a primary motivator for the executives in a lot of companies, and it's amazing what they will sometimes do, and what the law and the courts will allow them to do. Much of it is just legal forms of theft and fraud. Unless you're a lawyer, though, you might not have the resources to sue them, but you can decide that things are going in a bad direction and get your money out while you can.
Last edited by Karamatsu on Sun Nov 28, 2021 3:59 am, edited 2 times in total.
tim1999
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Re: annual reports

Post by tim1999 »

No, I don't read them, whether for funds or individual stocks. This thread does bring back memories of my parents getting dozens and dozens of paper annual reports in the mail each spring for all of the individual stocks I owned.
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