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QuestionsCategory: Financials QuadrantReading Annual Report
Chui Ong asked 5 years ago

Hi, 
I find that it is really quite hard to get through the Annual Reports, especially to read in details and find out “special circumstances” that could be detrimental or beneficial to the business. Is this something normal and we will get better over time or does this mean I am not quite cut out for value investing? On that note, do you have any tips or advice to making reading Annual Reports more interesting?
How much time should one typically take to research and analyze a company? Should it be just a few hours or a few days? Usually how many years of Annual Reports should we read to research the company?
For companies in our portfolio and watchlist, do we have to revalue the stocks annually based on the latest Annual Reports? If not, how can we still have confidence in our analysis over time?
Thanks!

1 Answers
Victor Chng answered 5 years ago

Hi Chui Ong,
 
What you experiencing is extremely normal, you will slowly build up your knowledge and get better over time. To make reading annual report more interesting, you should try to act like a detective who want to uncover evidence to solve the mystery. This is how I always think and act when I read annual report. I treat it like a game. 
There is no fixed time to analysing a company and I do not recommend you to do that because once you do that, it will give you a feeling that reading an annual report is a work and you will not feel like reading it after a few times. 
 
I will read as many annual report that I can get hold. For more established company that I have confidence, I usually track them once a year but for smaller company, I usually track half yearly.

Chui Ong replied 5 years ago

Thank you, Victor. Thinking like a detective sounds interesting! I will give that a try.