Poring through annual reports/corporate filings-a dying art in India?

Graham and most other successful fundamental style investors have recounted experiences where they hit upon a big investment simply by reading what others had glossed over. Whether it be Graham’s railroad stock, Buffet’s initial investments, India’s Motilal Oswal & Rakesh Jhunjhunwala; they all have benefitted immensely from reading annual reports/corporate filings/prospectuses. In the USA, while the dumbing down has reduced it, there are still websites like 10Qdetective which do this for you.

In India, there is no comparable thing. And going by the quality of analyst reports, it is doubtful whether many of them do beyond cut-paste. One may argue that the ‘unsaid/unwritten’ works more than the written word in Asia-especially India. But then, with IFRS being in from FY2011-12 annual reporting period onwards, one must note that companies can get away with murdering the accounting rules-as long as they disclose it. And this is not a far fetched case. Enron did disclose its off balance sheet partnerships for years, it is just that nobody bothered to read those notes for a long-long time. It took diligent readers to spot the error. Michael Burry made a fortune on the subprime crisis by going through bond prospectuses(each of them hundreds of pages long!). And Buffet himself prefers to avoid the information overload in mass media, by selecting his reading and then closing his sensory organs to other stimuli.

So what is the way out? Analyst training is an option, but what about the retail investor who wishes to invest on his own? Perhaps, an elective should be offered as an advanced financial inclusion module