» Posted by Martin Weil on June 26, 2006

One man's answer

» Posted by Martin Weil on June 22, 2006

Apparently there's a simple reason: managers, in many cases, are trying to hide something.

This article explores the conclusions of a recent University of Michigan study on the topic of annual report readability. Bottom line - readable annual reports are more apt to be written by managers confident of their company's future earnings.

"Feng Li, an assistant professor of accounting at the university, measured annual report "readability" using a sample of more than 55,000 company reporting years. He examined syllables per word and words per sentence in reports filed with the Securities and Exchange Commission.

He used two readability measures.

First, the "Fog Index" indicated the number of years of formal education a reader of average intelligence would need to read the text once and understand it...

Second, the Kincaid Index rated the reports on a US primary school level.

According to the study, annual reports of companies with lower earnings were more difficult to read. Similarly, companies that had volatile earnings were more likely to produce abstruse reports."

Thanks again to Marginal Revolution.

» Posted by Martin Weil on June 16, 2006

BusinessWeek Online with the assistance of NAPFA (National Association of Financial Planners) offers the following five suggestions for emergency preparedness:

1. Have cash in small bills hidden in the home
2. Document your belongings and accounts
3. Backup your files
4. Have insurance
5. Emergency kit and a family rendezvous point

Here is the link to the full article.

» Posted by Martin Weil on June 12, 2006

Historian Niall Ferguson calls the United States' economy a dinosaur ...

... one of those huge herbivores whose bulk shook the ground. Like them, the U.S. economy is mind-bogglingly enormous - two and a half times as big as the next largest economy in the world and almost as large as that of the six other members of the Group of Seven combined. The catch is that it has to consume almost incessantly to sustain its great heft.

For those who want a thoughtful overview of all the things one might worry about regarding the fiscal position of the US - and what might happen as a consequence, Ferguson hits the major points in this article in Sunday's NYT Magazine. (registration required)

» Posted by Martin Weil on June 05, 2006

What if you received the following phone call? A stranger named Ed on the other end of the line says "Mr. Gerbus, I just bought your hard drive in Chicago."

MSNBC posts this cautionary tale of life in our new computer age.

The bottom line: Before disposing of a functioning computer hard drive, use one of several inexpensive disk erase utilities that permanently overwrite your personal data.