How to Read Financial Statements, Part 1 (Risk Over Reward)

8/14/2019 How to Read Financial Statements, Part 1 (Risk Over Reward)

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Risk over RewardThinking about Investing

How to Read FinancialStatements An Overview(Part 1)by Alpha and Vega, an Investor and a TraderFebruary 14th, 2010

In this issue:1) Principles of Reading Financial Statements2) Types of Financial Statements and Where to Get Them3) Financial Statements are Marketing Documents

4) Haggis is Much Worse than Spinach (Reading Recommendations)

My advice to small-time savers: Avoid stocks. I tell them to buy CDs or diversified bond funds fromVanguard or Pimco, such as: BND, BIV, BVV, VBMFX, VIPSX, or PTTAX. For many, buying a stockindex fund is a poor idea. You need a sense of whether the stock market is over- or under-valuedbefore you buy the price you pay matters. Over the very long run (30 years or longer), a stock indexlike the S&P 500 (SPY for the fund) will likely outperform a bond fund, but there is no guarantee for this.

Also most investors are mortals with shorter investment horizons and nerves of jelly, who cantpsychologically take large losses. So I suggest bond funds instead of stock funds. For the few whowant to get their hands dirty and directly own stocks, bonds, or ETFs, its essential to: i) have a decentbusiness sense, ii) learn how to read financial statements and value securities. Since the conversationin Risk Over Reward is about thinking about investing, I will share some of our thoughts on How to

Read Financial Statements over a series. This series will be a starting point for curious people toteach themselves how to read financial statements.

The first letter in the series begins with principles and high-level exposure. The remaining ones will gointo the dirty details of the statements themselves.

One final note: We publish information on the website and over Twitter that we do not include in thenewsletter. If you want to follow those, visit the website, set up an RSS feed, and follow us on Twitter.

Risk over Reward: A conversation about intelligent investing we discuss the nature of risk and uncertainty,macroeconomics, security valuation, and how to think about markets and invest profitably -http://www.riskoverreward.com/

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See Alphas reading recommendations here: Investment Classics
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1) Principles of Reading Financial Statements

Before jumping into the types of statements and what they mean, I offer some basic principles below.

A bird in the hand is worth two in the bush. Investors read corporate financial statements to buysecurities and make money. They invest $1 today to get $2 tomorrow. More specifically, the investorBen Graham believed stocks should return twice (2x) what investment grade bonds did to be worth the

extra risk. That basic tenet is ignored in todays Cult of the Equities, but it will return. To evaluate anysecurity (bond or stock),Warren Buffett stated his formula in his Berkshire Hathaway annual letter in2000:

Leaving aside tax factors, the formula we use for evaluating stocks and businesses is identical.Indeed, the formula for valuing all assets that are purchased for financial gain has beenunchanged since it was firstlaid out by a very smart man in about 600 B.C. (though he wasntsmart enough to know it was 600 B.C.).

The oracle was Aesop and his enduring, though somewhat incomplete, investment insight was "abird in the hand is worth two in the bush." To flesh out this principle, you must answer only threequestions. How certain are you that there are indeed birds in the bush? When will they emerge

and how many will there be? What is the risk-free interest rate (which we consider to be the yieldon long-term U.S. bonds)? If you can answer these three questions, you will know the maximumvalue of the bush and the maximum number of the birds you now possess that should be offeredfor it. And, of course, dont literally think birds. Think dollars.

Aesops investment axiom, thus expanded and converted into dollars, is immutable. It applies tooutlays for farms, oil royalties, bonds, stocks, lottery tickets, and manufacturing plants. Andneither the advent of the steam engine, the harnessing of electricity nor the creation of theautomobile changed the formula one iota nor will the Internet. Just insert the correct numbers, andyou can rank the attractiveness of all possible uses of capital throughout the universe.

Common yardsticks such as dividend yield, the ratio of price to earnings or to book value, and

even growth rates have nothing to do with valuation except to the extent they provide clues to theamount and timing of cash flows into and from the business. Indeed, growth can destroy value if itrequires cash inputs in the early years of a project or enterprise that exceed the discounted valueof the cash that those assets will generate in later years. Market commentators and investmentmanagers who glibly refer to "growth" and "value" styles as contrasting approaches to investmentare displaying their ignorance, not their sophistication. Growth is simply a component usually aplus, sometimes a minus, in the value equation.

Alas, though Aesops proposition and the third variable that is, interest rates are simple, pluggingin numbers for the other two variables is a difficult task. Using precise numbers is, in fact, foolish;working with a range of possibilities is the better approach.

Usually, the range must be so wide that no useful conclusion can be reached. Occasionally,though, even very conservative estimates about the future emergence of birds reveal that theprice quoted is startlingly low in relation to value. (Lets call this phenomenon the IBT InefficientBush Theory.) To be sure, an investor needs some general understanding of business economicsas well as the ability to think independently to reach a well-founded positive conclusion. But theinvestor does not need brilliance nor blinding insights.

At the other extreme, there are many times when the most brilliant of investors cant muster aconviction about the birds to emerge, not even when a very broad range of estimates isemployed. This kind of uncertainty frequently occurs when new businesses and rapidly changing
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industries are under examination. In cases of this sort, any capital commitment must be labeledspeculative.

Now, speculation in which the focus is not on what an asset will produce but rather on what thenext fellow will pay for it, is neither illegal, immoral nor un-American. But it is not a game in whichCharlie and I wish to play. We bring nothing to the party, so why should we expect to takeanything home?

The line separating investment and speculation, which is never bright and clear, becomes blurredstill further when most market participants have recently enjoyed triumphs. Nothing sedatesrationality like large doses of effortless money. After a heady experience of that kind, normallysensible people drift into behavior akin to that of Cinderella at the ball. They know that overstayingthe festivities, that is, continuing to speculate in companies that have gigantic valuations relativeto the cash they are likely to generate in the future will eventually bring on pumpkins and mice.But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, thegiddy participants all plan to leave just seconds before midnight. Theres a problem, though: Theyare dancing in a room in which the clocks have no hands.

Principal-agent problems stink. When you (the principal) hire someone else to work for you (the

agent), the agents self interest may differ from yours - her actions may help her and hurt you instead ofbenefitting you. Its a conflict of interest. The classic example is corporate management (RJR Nabiscois just one case). Executives often spend money on perks, like corporate jets and celebritysponsorships, instead of paying dividends to shareholders or buying back stock. This is still a hugeproblem. You can buy undervalued stock in a profitable, healthy business and never make money. Ifinvestors lack control, managers eat their cake. Thats why bond investors get covenants and whyshrewd stock investors get board seatsto protect themselves with control. Theres only one way toknow how faithful or greedy managers are: read the financial statements. The problem is that themanagers are the ones making the statements, and they pay the accounting firms to audit them.Perhaps the principle here is: Trust, but verify. You will have to watch for common accountingshenanigans.

Bounded rationality forces humility. Human beings arent rational much of the time. The limits ofcognition, time, and energy can rob one of understanding or lead one to make poor decisions. Thismeans some financial statements are too difficult to understand, like General Electric (GE). Others areblack boxes and impossible to understand, like Citigroup (C). I generally put these in the too difficultpile, after spending a frustrating few hours trying to understand them. Even for simpler, bread andbutter companies like Chipotle (CMG), items like capital expenditures can be difficult to project.Finally, as Warren Buffett points out above, many businesses are too unstable; you just cantunderstand them, let alone value them. Bounded rationality forces you to stick to your circle ofcompetence (the small circle in which you know much more about something than most people know).

A representation of reality isnt reality. Financial statements are a representation of reality, of acompanys economic and financial health. But dont get confused. The numbers arent reality. Just aspictures of the Great Pyramids can be crudely or subtly doctored in the lab, so can financial statements.Too often, people assume facts like numbers and numerical tables in financial statements are true.Sometimes the numbers are wrong due to fraud and mistakes. Other times, they are true in a narrowcontext but misleading in a broader one. Also, a snapshot at a point in time can be misleading. Manylarge broker-dealer banks, for example, do massive financial transactions before a quarters end tomake their balance sheets look cleaner and healthier on the last day of the quarter (the reporting day).They undo this a few days into the new quarter and go on with their sordid, risky business. So: beskeptical.

You cant buy breakfast with earnings. Cash flows matter more than earnings. Under the
http://en.wikipedia.org/wiki/Principal-agent_problemhttp://en.wikipedia.org/wiki/Principal-agent_problemhttp://en.wikipedia.org/wiki/Principal-agent_problemhttp://en.wikipedia.org/wiki/Principal-agent_problemhttp://en.wikipedia.org/wiki/Principal-agent_problemhttp://www.amazon.com/Barbarians-Gate-Fall-RJR-Nabisco/dp/0060536357http://www.amazon.com/Barbarians-Gate-Fall-RJR-Nabisco/dp/0060536357http://www.amazon.com/Barbarians-Gate-Fall-RJR-Nabisco/dp/0060536357http://www.amazon.com/Barbarians-Gate-Fall-RJR-Nabisco/dp/0060536357http://en.wikipedia.org/wiki/Bounded_rationalityhttp://en.wikipedia.org/wiki/Bounded_rationalityhttp://en.wikipedia.org/wiki/Bounded_rationalityhttp://en.wikipedia.org/wiki/Bounded_rationalityhttp://en.wikipedia.org/wiki/Bounded_rationalityhttp://www.amazon.com/Barbarians-Gate-Fall-RJR-Nabisco/dp/0060536357http://www.amazon.com/Barbarians-Gate-Fall-RJR-Nabisco/dp/0060536357http://en.wikipedia.org/wiki/Principal-agent_problemhttp://en.wikipedia.org/wiki/Principal-agent_problemhttp://en.wikipedia.org/wiki/Principal-agent_problem


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accounting rules of GAAP and IFRS, accrual earnings are supposed to present the economicsubstance of a companys performance. Accrual earnings are useful to know but are overemphasizedby Wall Street and dumber investors. Companies can manipulate earnings easily, but its tougher tomanipulate cash flows (Enron made a valiant effort). Shrewd hedge fund investors and savvymanagers care about one thing: freecash flows, that is, cash flows that can be taken out of thecompany to pay investors. Or as Cokes former CEO Roberto Goizueta had stitched on a pillow: Theone with the biggest cash flow wins.

Numbers without context are meaningless. All the numbers in financial statements are measured inreference to something else. By themselves, numbers mean little to nothing. So a newspaper couldblare that Coke earned $2 per share this quarter and Pepsi earned $2.50. Does that mean that Pepsiis better? Not at all. Perhaps Cokes stock is trading at $20 but Pepsis stock is trading at $50, soCoke is giving a 10% earnings yield and Pepsi is giving a 5% earnings yield. Maybe Pepsi is taking onmuch more debt and risk to get its higher earnings, and the company could implode and wipe out all theshareholder value. Or maybe Pepsi stuffed its channels to increase current sales and profits at theexpense of future ones. Or maybe all else is equal but Coke has much higher earnings growth ratesand will overtake Pepsi soon. The point is that a single number means little. The significance of thenumber comes from the multiple possible contexts in which you examine it.

Treasuries are your measuring stick. All financial assets are measured in reference to the yieldbeing offered by 10-year US Treasuries, what investors call the risk-free rate. Without a measuringstick, its impossible to know whether the earnings and cash flows a company generates, relative toassets, book value, or market value, are high or low. Some investors prefer to use 10-year GermanBunds (Bundesanleihenare the government bonds of the Federal Republic of Germany). All investorscompare the yields (earnings, cash flow, dividends) from corporate financial statements to those fromgovernment bonds. Bond investors do this explicitly with spread and OAS calculations. Stockinvestors do this with P/E capitalization rates and the discount rates in cash flow models. The latest USTreasury and German Bund rates are here:

2) Types of Financial Statements and Where to Get Them

The rules that govern how companies prepare and present their financial statements come from either:i) Generally Accepted Accounting Principles (GAAP), set by an American organization, FASB, in

Connecticut; or,ii) International Financial Reporting Standards (IFRS), set by an international organization, IASB, in

London. Learn more about the IFRS here.
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For decades, all American companies had to follow GAAP due to SEC rules. In the last decade, manyinternational companies have been switching to IFRS and the SEC has slowly encouraged Americancompanies to switch to IFRS. The two standards are fairly close and will converge into one, the IFRS,by 2015.

In todays internet driven world, you can access financial statements in two ways:

i) Directly from a corporations Investor Relations website: For Cokes latest annual report, useGoogle with the search term Coke Investor Relations. It will take you here (and the tab on the left willtake you to their reports):

ii) Indirectly from the SECs EDGAR database: The SEC requires all companies to file a range offinancial statements in its online, EDGAR database. EDGAR is a gold mine of neutral financialstatements (just black and white facts no marketing pictures, spin, and such). Any serious investorhas to become familiar with it. You can find EDGAR here (you should bookmark itits the place onthe web I visit most often):

http://www.sec.gov/edgar/searchedgar/companysearch.html
http://www.sec.gov/edgar/searchedgar/companysearch.htmlhttp://www.sec.gov/edgar/searchedgar/companysearch.htmlhttp://www.sec.gov/edgar/searchedgar/companysearch.html


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Searching by the companys name or ticker symbol (KO for Coke), takes you to a place where you can

directly access the filing, or filter the results by a filing type:

The SEC has numerous types of filings, which I rank by tiers based on their importance.

Tier-1: Annual and quarterly statements, prospectuses10-K Annual reports. The best general description of a business and its performance; verified by an

independent, outside auditor.10-Q Quarterly reports. Not as long and descriptive as the annual and un-audited, but offered

quarterly.S-1 and/or 424 Registration forms and prospectuses for new securities. Every time a company offers

new securities it has to release one of these, and they are a treasure trove of information.


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Tier-2: Other statementsDEF14A The proxy statement - it has information on executive compensation and perks, along with

other control and ownership information.8-K Events or changes between quarterly reports contains material information about events

between quarters. Often bond indentures and their covenants are hidden away in these reports.144 Proposed sale of securities. This lets you know what other securities a company is selling every

quarter to the primary market.

4 Insider trading. This contains information on insider sales and purchases.20-F Annual report for a foreign company. If a foreign companys stock trades in the US as an ADR,it must file with the SEC.

6-F Quarterly report for a foreign company.

This list isnt exhaustive. I regularly use about 5 to 7 other reports not mentioned above, but Id rathernot discuss them as theyre less well known and I like the lack of competition. These tend to be nichereports only of concern to investment professionals, so dont worry about them. For a full listing of allSEC reports and examples of them, see this list: SEC Filings Types

3) Financial Statements are Marketing Documents

One thing about Bloomberg and all the secondary information databases: they lull investors intothinking that whats on the screen is correct, true, and real. This is where I refer people back to theprinciple that A representation of reality isnt reality. More specifically:

FINANCIAL STATEMENTS arecarefully presented, often audited, over-lawyered,

MARKETING DOCUMENTS

created by a companys management

TO SELL YOU SOMETHING(stocks, bonds, loans, etc., but please dont read the fine print or footnotes).

Anytime someone is a selling you a bill of goods, my admonition is:Caveat emptor (buyer beware).

I have found that paranoid and skeptical people who verify, verify, and verify tend to be the best

investors. So an attitude of skepticism is called for, as management will often know more than you doabout their company and its industry. Its a situation of information asymmetry. They know more.Youre a sucker with money. A sucker with money often ends up just a sucker.

Besides an overlay of skepticism (even for EDGAR documents), you need to remember that there aremultiple users of financial statements, including:

Lenders and bond buyers (Creditors): They dont care about earnings per share, bookvalues, or P/E ratios. They want to get their money back with interest; they use covenantsto manipulate management. After a careful balance sheet analysis, creditors look at
http://secwatch.com/filings/types.jsphttp://secwatch.com/filings/types.jsphttp://secwatch.com/filings/types.jsp


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coverage and try to measure the risk of default and loss-given default (LGD). Shareholders: They care about the traditional analysis ratios and metrics. In the last few

decades, shareholder primacy and the Cult of the Equities have led financial statements tobe targeted toward shareholders (witness income statements, with EPS on the bottom, butnot coverage ratios). While dividends and other payouts became dmod in the ninetiesand aughties (buybacks were the exception), payouts to shareholders will come back intofashion.

Recruiters and consultants: They want consulting gigs to assess companies and industries,hire away the best managers, and generally milk the cash cow that a large corporation is.

Managers: They are always selling others on something. They want raises fromshareholders via the compensation committee (and they use consultants to justifyoutrageous pay). They want cheap capital from the bond markets. They want competitorsand regulators to leave them alone. They want workers to be more productive and acceptless salary and fewer benefits. Managers are the ones who make the marketing documentswe call financial statements.

Competitors: They want a scoop on profitable lines of business and profit margins so theycan perhaps come in to compete. Managers want to conceal sensitive information, butgenerally err on the side of concealing information helpful to investors.

Government Regulators: They want to make sure a company is safe: safe products for

consumer goods, a safe balance sheet for banks and insurance companies, or saferegulatory compliance, such paying the right amount of taxes (IRS agents start with financialstatements).

So financial statements tend to be long and disjointed. They are sophisticated, technical, marketingdocuments for multiple audiences. You shouldnt read them like a novel, from beginning to end.Instead, focus on the sections important to you. The next letter in the series goes into details.

4) Haggis is Much Worse than Spinach (Reading Recommendations)

Now to the reading list. Warren Buffett called accounting the spinach for investors. No one reallylikes accounting, but eating it makes you better at understanding businesses and allocating capital. His

analogy fails for me because I like spinach it cooks rather well in many dishes. I would say thatlearning how to be a better reader of financial statements is more like eating haggis, which is Scottishoatmeal mixed with sheep's 'pluck' (heart, liver and lungs), minced with onion, suet, spices, and salt.The following books arent easy, but theyre where you should turn after this series for a much fuller,self-education:

First Course - Philosophy1)Benjamin Graham, Security Analysis (Sixth Edition Commentary from Seth Klarman, James Grant,and Bruce Greenwald) (I recommend reading all the editions, First to Fourth, to learn how to think).2)Leopold Bernstein, Analysis of Financial Statements3)Warren Buffett (ed. Lawrence Cunningham), The Essays of Warren Buffett

Second Course Technical Skills4)Martin Fridson and Fernando Alvarez, Financial Statement Analysis5)Charles Mulford and Eugene Comiskey, Creative Cash Flow Reporting6)Raymond Suutari, Business Strategy and Security Analysis

Third Course Detecting Manipulation and Fraud7)Howard Schilit, Financial Shenanigans (2nd Edition)8)Kathryn Staley, The Art of Short Selling9)Joseph Wells, Fraud Casebook: Lessons from the Bad Side of Business
http://www.amazon.com/Security-Analysis-Foreword-Buffett-Editions/dp/0071592539/ref=pd_sim_b_4http://www.amazon.com/Security-Analysis-Foreword-Buffett-Editions/dp/0071592539/ref=pd_sim_b_4http://www.amazon.com/Security-Analysis-Foreword-Buffett-Editions/dp/0071592539/ref=pd_sim_b_4http://www.amazon.com/Security-Analysis-Foreword-Buffett-Editions/dp/0071592539/ref=pd_sim_b_4http://www.amazon.com/Security-Analysis-Foreword-Buffett-Editions/dp/0071592539/ref=pd_sim_b_4http://www.amazon.com/Analysis-Financial-Statements-Leopold-Bernstein/dp/0070945047/ref=sr_1_1?ie=UTF8&qid=1265412835&sr=1-1-spellhttp://www.amazon.com/Analysis-Financial-Statements-Leopold-Bernstein/dp/0070945047/ref=sr_1_1?ie=UTF8&qid=1265412835&sr=1-1-spellhttp://www.amazon.com/Analysis-Financial-Statements-Leopold-Bernstein/dp/0070945047/ref=sr_1_1?ie=UTF8&qid=1265412835&sr=1-1-spellhttp://www.amazon.com/Essays-Warren-Buffett-Lessons-Corporate/dp/0966446127/ref=ntt_at_ep_dpi_1http://www.amazon.com/Essays-Warren-Buffett-Lessons-Corporate/dp/0966446127/ref=ntt_at_ep_dpi_1http://www.amazon.com/Essays-Warren-Buffett-Lessons-Corporate/dp/0966446127/ref=ntt_at_ep_dpi_1http://www.amazon.com/Financial-Statement-Analysis-Practitioners-Guide/dp/0471409154/ref=cm_lmf_tit_5http://www.amazon.com/Financial-Statement-Analysis-Practitioners-Guide/dp/0471409154/ref=cm_lmf_tit_5http://www.amazon.com/Financial-Statement-Analysis-Practitioners-Guide/dp/0471409154/ref=cm_lmf_tit_5http://www.amazon.com/Creative-Cash-Flow-Reporting-Sustainable/dp/0471469181/ref=cm_lmf_tit_6http://www.amazon.com/Creative-Cash-Flow-Reporting-Sustainable/dp/0471469181/ref=cm_lmf_tit_6http://www.amazon.com/Creative-Cash-Flow-Reporting-Sustainable/dp/0471469181/ref=cm_lmf_tit_6http://www.amazon.com/Business-Strategy-Security-Analysis-Investment/dp/078630409X/ref=cm_lmf_tit_16http://www.amazon.com/Business-Strategy-Security-Analysis-Investment/dp/078630409X/ref=cm_lmf_tit_16http://www.amazon.com/Business-Strategy-Security-Analysis-Investment/dp/078630409X/ref=cm_lmf_tit_16http://www.amazon.com/Financial-Shenanigans-Accounting-Gimmicks-Reports/dp/0071386262/ref=cm_lmf_tit_12http://www.amazon.com/Financial-Shenanigans-Accounting-Gimmicks-Reports/dp/0071386262/ref=cm_lmf_tit_12http://www.amazon.com/Financial-Shenanigans-Accounting-Gimmicks-Reports/dp/0071386262/ref=cm_lmf_tit_12http://www.amazon.com/Financial-Shenanigans-Accounting-Gimmicks-Reports/dp/0071386262/ref=cm_lmf_tit_12http://www.amazon.com/Financial-Shenanigans-Accounting-Gimmicks-Reports/dp/0071386262/ref=cm_lmf_tit_12http://www.amazon.com/Art-Short-Selling-Marketplace-Book/dp/0471146323/ref=cm_lmf_tit_13http://www.amazon.com/Art-Short-Selling-Marketplace-Book/dp/0471146323/ref=cm_lmf_tit_13http://www.amazon.com/Art-Short-Selling-Marketplace-Book/dp/0471146323/ref=cm_lmf_tit_13http://www.amazon.com/Fraud-Casebook-Lessons-Side-Business/dp/0470134682/ref=sr_1_1?ie=UTF8&s=books&qid=1265413199&sr=1-1http://www.amazon.com/Fraud-Casebook-Lessons-Side-Business/dp/0470134682/ref=sr_1_1?ie=UTF8&s=books&qid=1265413199&sr=1-1http://www.amazon.com/Fraud-Casebook-Lessons-Side-Business/dp/0470134682/ref=sr_1_1?ie=UTF8&s=books&qid=1265413199&sr=1-1http://www.amazon.com/Fraud-Casebook-Lessons-Side-Business/dp/0470134682/ref=sr_1_1?ie=UTF8&s=books&qid=1265413199&sr=1-1http://www.amazon.com/Art-Short-Selling-Marketplace-Book/dp/0471146323/ref=cm_lmf_tit_13http://www.amazon.com/Financial-Shenanigans-Accounting-Gimmicks-Reports/dp/0071386262/ref=cm_lmf_tit_12http://www.amazon.com/Business-Strategy-Security-Analysis-Investment/dp/078630409X/ref=cm_lmf_tit_16http://www.amazon.com/Creative-Cash-Flow-Reporting-Sustainable/dp/0471469181/ref=cm_lmf_tit_6http://www.amazon.com/Financial-Statement-Analysis-Practitioners-Guide/dp/0471409154/ref=cm_lmf_tit_5http://www.amazon.com/Essays-Warren-Buffett-Lessons-Corporate/dp/0966446127/ref=ntt_at_ep_dpi_1http://www.amazon.com/Analysis-Financial-Statements-Leopold-Bernstein/dp/0070945047/ref=sr_1_1?ie=UTF8&qid=1265412835&sr=1-1-spellhttp://www.amazon.com/Security-Analysis-Foreword-Buffett-Editions/dp/0071592539/ref=pd_sim_b_4http://www.amazon.com/Security-Analysis-Foreword-Buffett-Editions/dp/0071592539/ref=pd_sim_b_4


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Fourth Course Putting Everything Together10)The Certified Financial Analyst (CFA) Course of Study: Its a great starting point for accounting,statistics, and valuation. Ive taken the course and exams and I highly recommend them.

For more recommendations, see this list: Investment Classics.

The skill of reading financial statements to understand businesses is a self-taught skill. Others can

prod you in a certain direction. But it takes time, practice, skeptical thinking, and perseverance.Ultimately its up to you.

Your experienced and ignorant investor,[email protected] 2010 Risk Over Reward. All Rights Reserved

You have permission to publish this article electronically or in print as long as the following is included:

Risk over Reward: A conversation about intelligent investing we discuss the nature of risk and uncertainty,macroeconomics, security valuation, and how to think about markets and invest profitably -http://www.riskoverreward.com/

Read our online posts at: http://www.riskoverreward.com/

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See Alphas reading recommendations here: Investment Classics
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