A question on making income and question on annual reports

[RandomInvestor]

Hey guys so quickly I wanted to ask everytime you have ideas on making money you just shoot ideas, why do SO MANY people just assume you are trying to get quick rich? It seems like to me jealously or an excuse is "it's not easy" so what! Are you supposed to not do something because its hard? About the jealousy part I think they feel threatened that you might be more successful than them, I have had alot of these experiences.

And the second thing on annual reports is it necessary to go through EVERY page on it? It is incredibly dry and I get its supposed to be like that but half of it seems like rubbish to just fill up some pages, like when it talks about board of directors and that stuff. I got no problem doing it if it is ABSOULTELEY necessary but I want to make sure I am not wasting any time. It might seem like I am being lazy but working smarter is better than harder.

 

[galumay]

I dont read all of the AR's. I am sure there are more successful investors than me who do! I like to get an overview from reading the main reports in the first few pages and then I skip thru the Director's report and head to the Financials where I spend most of my time and effort.

As far as the 'feels' you have about what other people think of you, well, something I learned a long time ago is if everyone around seems to be reacting in the same way then do some quick self reflection!

 

[RandomInvestor]

This "As far as the 'feels' you have about what other people think of you, well, something I learned a long time ago is if everyone around seems to be reacting in the same way then do some quick self reflection!" I have learned that too recently aswell well a couple years ago or so. I have a bit of a curved back I knew it when I sit down but didn't realize when I was walking then even people I just met tell me later on and then it sorta came to my mind "if everyone is telling me its probably true" so I see what you are saying. I have tried to reflect off it, I think about it on a daily the bottom line I guess is I want to make money.

 

[luutzu]

Hey guys so quickly I wanted to ask everytime you have ideas on making money you just shoot ideas, why do SO MANY people just assume you are trying to get quick rich? It seems like to me jealously or an excuse is "it's not easy" so what! Are you supposed to not do something because its hard? About the jealousy part I think they feel threatened that you might be more successful than them, I have had alot of these experiences.

And the second thing on annual reports is it necessary to go through EVERY page on it? It is incredibly dry and I get its supposed to be like that but half of it seems like rubbish to just fill up some pages, like when it talks about board of directors and that stuff. I got no problem doing it if it is ABSOULTELEY necessary but I want to make sure I am not wasting any time. It might seem like I am being lazy but working smarter is better than harder.

As Sptrawler once advised me, keep knocking and sooner or later something will give. As another wise guy with a couple billion dollars more than Homer, Ray Kroc said in his book, and also in a pretty good movie about him - The Founder, starring Batman: the key to success is persistence.

When people say that you're trying to get rich quick, they're probably dismissing your ideas and your ability more than saying that you're trying to get rich quick. It's a polite way of saying you're an idiot (or a dreamer, same difference).

As to the getting rich quick schemes, most people are head deep in it. Just they don't realise or want to see that they are.

To get rich quick is not conning people or have some wild, unusual ideas - there's only so many idiots you can con, and you'd be caught by the law or meet a few who got a few bucks left to hire some goon to give you a visit. As to the unusual ideas... well you're on your own with that one.

To get rich quickly, and safely, is to go and get a job, settle on a profession, real quick. Right out of school quick.

That's most of the people of the world. Not trying to belittle or put that down, but it is a heck of a lot easier to make stable income, get proper finances, get regular recognition, stability in relationship, start a family and able to provide for the kids with a proper job and title, doing it early and mastering it soon after. That's getting rich a whole lot quicker than going down any unconventional, unusual, path.

Going down that road less travel is what the polite people would call getting rich quick. Again, short hand for "he's an idiot with no hope thinking he'll make it rich... what a try hard".

So it's safer, getting rich a whole lot quicker, by sticking to the recognised profession and career ladder. What are those recognised professions? Ask your mother in law or the local bank manager.

For people with lots of ideas and no regular job... the path to riches is long and winding, full of alone time and a whole bunch of headaches and heartaches. Then one day he might become an overnight success, or just one of those guys most see as failures.

Drunken philosophising aside... to the Annual Reports...

-----

Annual reports should only be read when you want to know about the business in detail.

For most companies, you do not need to know its business in details to know its business. You just read those free financial metrics on Google, Yahoo or MorningStar, and that's more than enough to gauge whether you ought to know more.

If yes, I'd read and watch the result presentations to get an overview. If it still look interesting after that then crack open the Annual Report, turn to the financial statements, put it into DangInvestor's quickKPI module and within five minutes you'd be able to know if you ought to go further.

If you need to, then I'd go over the latest AR, starting with its its commentaries, scanning through its business and operations, read through its notes... then work my way back to maybe 5 years or whenever best represent the company's current state of affairs.

Sometime it might b worthwhile to analyse management's pay etc., but you usually know enough about management from the company's performance. And if you'd only buy at a big discount, and with limited capital base to make it wortwhile... just understanding the business and its financials in some details ought to suffice.

In short, open the AR only when you want to know the business in details. The preliminaries you can know from other sources.

What this mean is that there will be some great and coming businesses that you might miss; some that's just about to turn their operations around and have the wind behind its back etc.... but you can't win them all.

To do that, you'd then need to really go deep and read through a bunch of presentations and reports from A to Z; probably starts with those in industry you are familiar with first.

 

[RandomInvestor]

As Sptrawler once advised me, keep knocking and sooner or later something will give. As another wise guy with a couple billion dollars more than Homer, Ray Kroc said in his book, and also in a pretty good movie about him - The Founder, starring Batman: the key to success is persistence.

When people say that you're trying to get rich quick, they're probably dismissing your ideas and your ability more than saying that you're trying to get rich quick. It's a polite way of saying you're an idiot (or a dreamer, same difference).

As to the getting rich quick schemes, most people are head deep in it. Just they don't realise or want to see that they are.

To get rich quick is not conning people or have some wild, unusual ideas - there's only so many idiots you can con, and you'd be caught by the law or meet a few who got a few bucks left to hire some goon to give you a visit. As to the unusual ideas... well you're on your own with that one.

To get rich quickly, and safely, is to go and get a job, settle on a profession, real quick. Right out of school quick.

That's most of the people of the world. Not trying to belittle or put that down, but it is a heck of a lot easier to make stable income, get proper finances, get regular recognition, stability in relationship, start a family and able to provide for the kids with a proper job and title, doing it early and mastering it soon after. That's getting rich a whole lot quicker than going down any unconventional, unusual, path.

Going down that road less travel is what the polite people would call getting rich quick. Again, short hand for "he's an idiot with no hope thinking he'll make it rich... what a try hard".

So it's safer, getting rich a whole lot quicker, by sticking to the recognised profession and career ladder. What are those recognised professions? Ask your mother in law or the local bank manager.

For people with lots of ideas and no regular job... the path to riches is long and winding, full of alone time and a whole bunch of headaches and heartaches. Then one day he might become an overnight success, or just one of those guys most see as failures.

Drunken philosophising aside... to the Annual Reports...

-----

Annual reports should only be read when you want to know about the business in detail.

For most companies, you do not need to know its business in details to know its business. You just read those free financial metrics on Google, Yahoo or MorningStar, and that's more than enough to gauge whether you ought to know more.

If yes, I'd read and watch the result presentations to get an overview. If it still look interesting after that then crack open the Annual Report, turn to the financial statements, put it into DangInvestor's quickKPI module and within five minutes you'd be able to know if you ought to go further.

If you need to, then I'd go over the latest AR, starting with its its commentaries, scanning through its business and operations, read through its notes... then work my way back to maybe 5 years or whenever best represent the company's current state of affairs.

Sometime it might b worthwhile to analyse management's pay etc., but you usually know enough about management from the company's performance. And if you'd only buy at a big discount, and with limited capital base to make it wortwhile... just understanding the business and its financials in some details ought to suffice.

In short, open the AR only when you want to know the business in details. The preliminaries you can know from other sources.

What this mean is that there will be some great and coming businesses that you might miss; some that's just about to turn their operations around and have the wind behind its back etc.... but you can't win them all.

To do that, you'd then need to really go deep and read through a bunch of presentations and reports from A to Z; probably starts with those in industry you are familiar with first.

Ok thanks alot Lutzuu. Also this line "
For people with lots of ideas and no regular job... the path to riches is long and winding, full of alone time and a whole bunch of headaches and heartaches. Then one day he might become an overnight success, or just one of those guys most see as failures."

that sounds ALOT like me lol, except I do have a job a part time one. As I write this I am reading what you wrote again and I don't know why but everytime I read something first time I never read it properly, anyways. I do spend ALOT of alone time pretty much 24/7 its a choice I made after highschool to ditch everything including social life to get successful/rich in life. Funny thing spending all that time progress is very slow lol.

I forgot to add I do follow my gut feeling alot apparently its a good thing it almost feels like everything I am doing it right (in terms of the stuff like learning investing) and that I am on the right path, I hope this doesn't back fire on me.

 

[luutzu]

Ok thanks alot Lutzuu. Also this line "
For people with lots of ideas and no regular job... the path to riches is long and winding, full of alone time and a whole bunch of headaches and heartaches. Then one day he might become an overnight success, or just one of those guys most see as failures."

that sounds ALOT like me lol, except I do have a job a part time one. As I write this I am reading what you wrote again and I don't know why but everytime I read something first time I never read it properly, anyways. I do spend ALOT of alone time pretty much 24/7 its a choice I made after highschool to ditch everything including social life to get successful/rich in life. Funny thing spending all that time progress is very slow lol.

I forgot to add I do follow my gut feeling alot apparently its a good thing it almost feels like everything I am doing it right (in terms of the stuff like learning investing) and that I am on the right path, I hope this doesn't back fire on me.

I think a good social life is healthy, both for your mind and maybe for opportunities. So go make friends I reckon. Just don't waste too much time. But yea, some people socialise too much thinking that it's friendship that binds whereas it's cash that glue people and afford Champagnes and nice restaurants to celebrate the friendship.

Progress will be slow, and risky. And may end in total failure. So you've got to come to term with that, see if it's a risk you'd want to take. It is a whole lot easier to get some job, work somewhat hard at it and maybe rise to the middle class in about ten years.

While that doesn't sounds like a whole lot, it is safer, you'll feel a lot happier, have more friends... and there are a lot of places worst than a nice home with a loving spouse and a couple of spoilt kids. That's all the riches any person could hope for any way.

That and with stable income and some assets, you could build some not too shabby riches on without too much worries.

Now, for the crazy rich level... I think that having money as an aim is good, but that's a destination you ought to aim for but the focus and the ticket to it is working very hard and trying a lot of things.

As the saying goes, the first million is the hardest... after that it'll be quite easy. Adjust that for inflation and maybe now it's the first 5 million [?]

Some Greek philosophers once said that it always serve a man well to be poor and struggle early in life. To achieve success too early and too easily is rarely good.

Or as a Chinese saying goes... fortune attain before 30 can never be long kept.

Too young, too much arrogance and ego, not experienced enough to sympathise or cheated on enough over small amounts... you'd want those experiences early in life. Cheaper lessons, as my father told us.

So if you don't let those failures and pain break you, you're going to be a whole lot smarter and harder working. Make good friends for life that way too... no one but a truly good friend would hang around you when you're broke. Well, there are some who do just for kicks, but you know who they are and they will soon get bored of that anyway.

 

[Smurf1976]

To get rich quickly, and safely, is to go and get a job, settle on a profession, real quick. Right out of school quick.

Regardless of what job you do, do it well.

That goes for pretty much anything. Even if it's a basic job where you can't really improve things, eg a bus driver on a fixed route, doing it well at least means you shouldn't have complaints coming in from passengers, traffic fines and be putting dents in the bus. You're more likely to keep your job if you're doing it well.

Same with anything. Plenty of lawyers, chefs, plumbers, builders and so on out there. Those who get themselves a reputation for doing it well tend to end up in a better job, or running a more successful business, than those who get a name as being the king of shortcuts and shoddy work.

You don't intentionally engage the services of a lawyer known for losing in court whilst charging a fortune. You don't get an electrician known for causing things to burn down. You don't go to a restaurant more than once if the chef is crap. Etc. The only way those who do crap work survive in the long term is by either constant job hopping (which only works for so long....), being cheaper than anyone else or pure good luck. That's not a good plan.

As for reading company reports, well I sure don't read every page unless I just happen to be interested in what the company is doing in detail. But when it comes to directors, well if their track record is of running things which go broke or worse still outright scams then that's in the same category as the losing lawyer or the electrician who keeps the fire brigade busy. Putting your money somewhere else is likely a wise move. If someone is crap at what they do or dishonest then that rarely changes.

Also be vary wary of any "image over substance" type people. Creating an image can certainly get the stock price up but it's substance that will lead to a viable business. Beware of anything where senior management are more worried about gaining attention to themselves via the media than what's actually going on with the business. With few exceptions elaborate "stunts" aren't how you run a successful business. Well, they aren't unless your "business" is that of simply taking money from investors.

As for ideas, well I came up with one a couple of days ago. A sudden "lightbulb moment" that it was staring me in the face whilst I was looking the other way. Next step = I'm compiling some figures as to how it would actually have worked in the past as a first step in seeing if the concept is valid or not. Worst case, I end up wasting some time. Best case, I'm onto something that I'll put a modest amount of capital into and profit from.

Getting rick quick? There's very few things in life that are worthwhile and best done quickly. Anything from becoming a successful artist to an athlete, you don't get there overnight and a lot of effort is required.

 

[RandomInvestor]

Thanks for advice guys/