Reports can reveal companies’ risk factors
THE MOTLEY FOOL
How can I research the risks facing various companies? – R.M., Woodbridge, Va.
Companies disclose many risks on their own. Publicly traded American enterprises are required to file annual “10-K” reports with the Securities and Exchange Commission (SEC). Accessible at websites such as finance.
yahoo.com and from the companies themselves, they detail a company’s financial and operational progress and also address risks facing the business.
Many companies cite increased regulation worldwide as a risk, which increases their cost of doing business. In developing nations, the lack of relevant laws or the presence of new and untested laws can also be an issue.
Don’t let the risks listed in 10-Ks make you want to avoid investing in any company at all. Every company faces risks. They shouldn’t scare you away, but do consider them.
MY DUMBEST INVESTMENT
I could have lost my shirt, twice. I love my brokerage’s online platform. Type in a ticker symbol, and out spews any information you want: charts, news, analysis, and so on. But when you go to place an order and you enter the ticker, you get lots of info, but not the company name.
This shouldn’t be a problem, but twice now, over some seven years, I’ve entered my order and later found out I had transposed letters in ticker symbols. The first time, I found out the day after the order filled, so it cost me $14 in commissions to buy and sell the stock over two days. The other time, I only noticed because the stock suddenly surged 14 percent, and I looked into what my boring old manufacturer could have done to wow the market. Oops. – D.M., Lincoln, Neb.
The Fool responds: Most brokerages’ trading systems will show you the company name when you enter the ticker, so double-check.
FOOLISH TRIVIA
One of my founders patented a postage-stamping machine in 1902. The other provided the U.S. Postal Service with stamp-canceling machines beginning in 1908. I was founded in 1920, the year I introduced the postage meter. I later pioneered lots of mail-related innovations, such as remote downloading of postage, Internet postage and networked digital mailing systems. Today I offer other companies software, hardware and services to improve their communications management. I employ more than 30,000 people and rake in more than $5 billion annually. I serve 2 million customers in more than 100 nations and hold 3,500 patents. Who am I?
Last Week’s Trivia Answer: I trace my history and management back to Wilbur and Orville. I’m the product of a 1929 merger of 12 companies. Who am I? Answer: Curtiss-Wright
THE MOTLEY FOOL IS WRITTEN BY TOM AND DAVID GARDNER FOR UNIVERSAL PRESS SYNDICATE. REACH THE GARDNERS AT FOOL@ FOOL.COM, OR BY MAIL TO MOTLEY FOOL, 1130 WALNUT, KANSAS CITY, MO 64106.
