Financial Fine Print: Uncovering a Company's True Value
Michelle Leder
Author
January 10, 2004
"Always read the fine print." It’s one of life's basic maxims, and for the individual investor, still smarting from recent market meltdowns,
the saying goes double. Too many claims of miraculous earnings have been
revealed as accounting mirages, with small shareholders among the
biggest losers.
Prudent investors want the whole story, not just the rose-colored version of events that managers tend to portray. Yet how do you uncover it, given the huge amount of available information? The trick is simply knowing where and how to look.
Financial Fine Print is a great place to start. Written by veteran financial
journalist Michelle Leder, this book lays bare the accounting tricks
companies use to whitewash their numbers. Using a clear, no-nonsense
style and pointing out numerous scandals and red flags, Leder sheds
light on the most obscure yet most essential aspect of annual reports
and SEC filings: the footnotes. "Too
many companies would prefer that you not read the footnotes," notes
former SEC Chairman Arthur Levitt. "That should be incentive enough
to delve into them." As investor skepticism builds and the specters
of Enron, Worldcom, Adelphia, and Global Crossing loom large, companies
trying to prove themselves above-board have added more footnotes and
documentation than ever to their reporting. This makes learning the
lessons of Financial Fine Print all the more important. Because the
simple fact is that if you want to own individual stocks, you need to do
your homework.
Michelle Leder has been writing about personal finance and investing for the past fifteen years, including ten years spent as a business reporter and later editor for daily newspapers in New York, Florida, and Connecticut. A freelance journalist for the past five years, her articles have appeared frequently in the New York Times, as well as dozens of other publications appealing to a wide range of ages and income levels from AARP: The Magazine to Parents. Previously, she was the personal finance columnist for LifetimeTV.com's "Money" and "Career" pages. As a daily journalist she won numerous awards, including the Society of Business Editors and Writers' prestigious Best in Business award and numerous awards in annual Associated Press contests in New York, Florida, and Connecticut. She holds a degree in economics from Brandeis University in Waltham, Massachusetts, and lives in Peekskill, New York, with her husband, Scott, and dog, Kumara. This is her first book.
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