The rather odd title stems from the fact that I'm back from watching the new Sherlock Holmes film released yesterday in India. It chronicles his fight with the criminal mastermind Prof Moriarty. While some purists may decry the 'James Bond' nature of this film, it has still stayed faithful to the vital elements of the book. The cinematic adaptation is great and has some one liners including the one where Holmes explains to Watson(as they are riding away in an open car) that their overt behavior makes it covert viz people are so distracted by the obvious that they may not give importance to it.
This is same for notes to accounts where the financial disclosures become so boilerplate and technical, that investors stop reading it, and companies can virtually get away with murder. This is not true just in India. In USA, the homeground of analysts and financial history, the darling of the stock exchanges Enron got away with mentioning its SPVs in its voluminous 10Ks, and very few analysts caught on(albeit the ones not influential enough to change the general herd mentality). And those who believe in the efficient markets hypothesis, may trust that someone has done that analysis of notes, and so the information should be priced in. But in a country where few equity research analysts are CAs/have requisite accounting background, this does seem too much to expect. Hence, the expectation of investors that they can freeload on someone else's research, may not be true. As I highlighted before on my blog, companies have disclosed vital information relating to litigation, seasonality, managerial remuneration etc but it is an open question how many see it. This may seem a rant, but I sincerely believe that even public information can hold goldmines of data, if it has not been properly analyzed before OR if others have failed to connect the dots.