500 pages a day of 10K's, 10Q's - what's your technique?

[dabuff]

“In my whole life, I have known no wise people (over a broad subject matter area) who didn't read all the time -- none, zero."

 

Warren Buffett reads spends about 80% of his day reading.

Lou Simpson reads 5-8 hours per day.

Todd Combs reportedly read up to 1000 pages per day after Warren Buffett told his business class to read 500 pages per day of 10K's, 10Qs and the like (though in a recent interview with Buffett, he ?misremembered it as 100 pages/day).

 

I have a few questions for the community:

 

How much do you all read each day? What proportion of SEC filings vs books, etc.?

How does it take you read a 10K or 10Q?

Do you have any lifehacks on getting through stacks of 10K's and 10Q's?

Most importantly, in the spirit of the Pareto principle, which parts of the SEC fillings do you value the most?

 

Buffett has said that if he could have any superpower, he would speedread. But it seems comprehension drastically decreases. Has anyone had success?

 

 

[Mephistopheles]

Buffett told the class to read 500/day and Combs upped it to 1,000? In that case, probably the best way to get ahead is to one up Combs and read 2,000 pages a day. Anyone who can't do that should only be buying low cost index funds.

[dabuff]

Here's the article about Todd Combs: http://www.omaha.com/money/investors-earn-handsome-paychecks-by-handling-buffett-s-business/article_bb1fc40f-e6f9-549d-be2f-be1ef4c0da03.html

[Mephistopheles]

I know, I was just kidding. There are a few long threads on this topic over the last year or two. Apparently someone talked to Combs in person and he said the 500/day # is misquoted and he actually does 100/day. That would explain the interview in which he also said 100.

[jawn619]

I read about 2 books a week. 10-Qs and 10-Ks all look the same after a while and I just focus on a few sections.

[LongHaul]

 

How much do you all read each day? What proportion of SEC filings vs books, etc.?

How does it take you read a 10K or 10Q?

Do you have any lifehacks on getting through stacks of 10K's and 10Q's?

Most importantly, in the spirit of the Pareto principle, which parts of the SEC fillings do you value the most?

 

Buffett has said that if he could have any superpower, he would speedread. But it seems comprehension drastically decreases. Has anyone had success?

 

I have personally had zero success speed reading and i have tried it a bunch of times.  Perhaps it is just me but I find I miss stuff when reading faster so i just go at my own pace.

 

I think it is critical to focus on primary information rather than secondary sources.  You would be surprised how many people don't seem to touch 10-K's.  It is hard working getting through it but important.

 

This is for overview purposes not a detailed valuation.  It takes me ~1-3 hrs to read a 10-k.  I try to do one maybe 2 a day.  I will generally read the business section of the 10-k to figure out what the company does and think about it. Then I will turn to the segment breakout to see which segments are big or high margin.  Then I will read the MDA, financial statements and notes.  I skim the risk section, skip the governance on foreign annuals, etc.  If it was something I was going to invest in i would spend more time on the entire 10-K. 

[oddballstocks]

Only 1000 pages a day...pfff, I'm at at LEAST 2,400 a day.  I read one page every minute every hour every day. While I sleep I listen. To audio books so I don't fall behind. Sometimes I will have three or four cassette players going at once so I can listen to multiple books at once. And of course I like to hold a book in each hand and read those as well at the same time. My daily page count is off the charts.

 

I'm sitting by my phone waiting for Buffett to call me.

[Jurgis]

I'm sitting by my phone waiting for Buffett to call me.

 

What a waste of time...

 

...

 

You could read some extra pages while waiting at least!  ;D

[Charlie]

"Only 1000 pages a day...pfff, I'm at at LEAST 2,400 a day.  I read one page every minute every hour every day. While I sleep I listen. To audio books so I don't fall behind. Sometimes I will have three or four cassette players going at once so I can listen to multiple books at once. And of course I like to hold a book in each hand and read those as well at the same time. My daily page count is off the charts.

 

I'm sitting by my phone waiting for Buffett to call me."

 

 

You could also start eating the pages. Then you use ears, eyes and mouth simultaneous.

You will feel the focus and feel like a true value investor.  ;)

[writser]

Only 1000 pages a day...pfff, I'm at at LEAST 2,400 a day.  I read one page every minute every hour every day. While I sleep I listen. To audio books so I don't fall behind. Sometimes I will have three or four cassette players going at once so I can listen to multiple books at once. And of course I like to hold a book in each hand and read those as well at the same time. My daily page count is off the charts.

 

I'm sitting by my phone waiting for Buffett to call me.

 

Cassette players? At first I thought wow, this guy is oldschool but now I get it - you can play them at double speed.

[SmallCap]

I used to read between 50 and 100 books a year but at this point in my life I have children ages 7, 5, 3 and to be honest my reading has gone down to between 10 and 20 books a year. what has kept me at that level is audio books and the one thing I can offer is that you can fairly easily listen to audio books at 2X speed and comprehension remains excellent some books I can go to 3X speed.

[Mephistopheles]

Only 1000 pages a day...pfff, I'm at at LEAST 2,400 a day.  I read one page every minute every hour every day. While I sleep I listen. To audio books so I don't fall behind. Sometimes I will have three or four cassette players going at once so I can listen to multiple books at once. And of course I like to hold a book in each hand and read those as well at the same time. My daily page count is off the charts.

 

I'm sitting by my phone waiting for Buffett to call me.

 

I suggest learning Braille so you can read a book with each hand while reading/listening with your eyes and ears.

[Jurgis]

the one thing I can offer is that you can fairly easily listen to audio books at 2X speed and comprehension remains excellent some books I can go to 3X speed.

 

Just please don't do this while driving, kk thx OK?

 

 

[MrB]

"A man should think twice as much as he reads" - AW Tozer

 

P.S. I understand Tozer was a prolific reader.

[Mephistopheles]

"A man should think twice as much as he reads" - AW Tozer

 

P.S. I understand Tozer was a prolific reader.

 

I suppose this means that Combs must be thinking about 1,000 pages worth of information every day.

[enoch01]

Ever since I switched over to just using mega-large fonts for everything, I'm getting through many more pages per day and have become a much better investor.

[Travis Wiedower]

I guess I'll give a serious answer. First off, I have no idea how much I read every day. The majority of what I read is on the computer so I have no clue how that converts to an actual number of pages. I read a lot, as does every other serious investor. It's basically a requirement for the job. When I first got into investing I read a ton of investing books (which was great) but most investing books I read now are more for entertainment than anything else. Most of my book reading lately has been psychology related (which still helps with investing of course). During the day almost all my reading is investment related whether that's SEC filings or VIC/CoBaF, blogs etc. Then I try and read at least a couple chapters out of my current book every night.

 

How long it takes to read a 10-K varies so much it's not even worth saying. Some take 30 minutes and some take 3 hours. I only invest in small companies so the majority of the ones I read are not too laborious. As jawn619 said, after you read a bunch of them you realize how pointless a lot of the text is. I scan the risk factor headlines and read the ones that sound interesting (e.g. not the "we have competitors" and "a terrorist might bomb our headquarters" ones that are in every single 10-K) and always read the business overview/notes to financial statements. But that includes scanning and skipping some stuff as well. Also depends if it's a brand new company you know little about or a company you've followed for years.

[undervalued]

I guess I'll give a serious answer. First off, I have no idea how much I read every day. The majority of what I read is on the computer so I have no clue how that converts to an actual number of pages. I read a lot, as does every other serious investor. It's basically a requirement for the job. When I first got into investing I read a ton of investing books (which was great) but most investing books I read now are more for entertainment than anything else. Most of my book reading lately has been psychology related (which still helps with investing of course). During the day almost all my reading is investment related whether that's SEC filings or VIC/CoBaF, blogs etc. Then I try and read at least a couple chapters out of my current book every night.

 

How long it takes to read a 10-K varies so much it's not even worth saying. Some take 30 minutes and some take 3 hours. I only invest in small companies so the majority of the ones I read are not too laborious. As jawn619 said, after you read a bunch of them you realize how pointless a lot of the text is. I scan the risk factor headlines and read the ones that sound interesting (e.g. not the "we have competitors" and "a terrorist might bomb our headquarters" ones that are in every single 10-K) and always read the business overview/notes to financial statements. But that includes scanning and skipping some stuff as well. Also depends if it's a brand new company you know little about or a company you've followed for years.

 

Thank you Travis. That's very helpful as a beginner investor. What do you do when reading 10K? Do you take notes? Do you create excel spreadsheet from data in 10K? What kind of questions do you ask yourself while reading?

[Guest notorious546]

Safal Niveshak show's some examples that he does when reading annual reports. could give you some ideas on things to think about when reading other ones.

 

http://www.safalniveshak.com/annual-report-review-ashok-leyland/

[ScottHall]

I quit trying this a year or two ago. It's not worth it; most information is pretty much irrelevant and you're just wasting your own time unless you enjoy it. Let's see, read all day, every day in an attempt to eke out another couple hundred basis points of alpha OR treating time like the finite asset it as and doing things that give me true joy.

 

Real tough call, there.

[Travis Wiedower]

Thank you Travis. That's very helpful as a beginner investor. What do you do when reading 10K? Do you take notes? Do you create excel spreadsheet from data in 10K? What kind of questions do you ask yourself while reading?

 

Well first off, I think if you're just getting started it's important to read a few and see what you think. Everyone learns differently so how I read may not help you. Alas, I like to read through a 10-K and initially take notes/highlight (similar to the one notorious546 just posted). When finished I review all the notes/highlights and transcribe the most important stuff into a file on my computer. Every company is different in terms of what you're looking for, but in general just look for things that seem important: Did inventory increase significantly year over year? Are they involved in any lawsuits? Does something from the MD&A not mesh with something in the notes? Do they seem to provide enough information to properly analyze the company or is information vague/left out?

 

And yes, I copy all financials into my own spreadsheets. There are many sources out there that will nicely display this historical information for you, but a lot of times adjustments are necessary so I like doing it myself.

[Mephistopheles]

I quit trying this a year or two ago. It's not worth it; most information is pretty much irrelevant and you're just wasting your own time unless you enjoy it. Let's see, read all day, every day in an attempt to eke out another couple hundred basis points of alpha OR treating time like the finite asset it as and doing things that give me true joy.

 

Real tough call, there.

 

Hi Scott,

 

I know you own AMZN, FB, MKL and some others. Just wondering what you do to keep up with these, since it seems like you don't dedicate a lot of time to reading.

[dabuff]

From Munger's and Buffett's comments and those of other investing veterans, they all echo the sentiments that the SEC filings of today are less useful than those of yesteryear as much of the important information is getting buried among the unimportant.

 

So more and more this is becoming of separating the wheat from the chaff.