Reading Every Annual Report for an Industry

People have different ways of uncovering investment ideas. I have tried many of them.

When it comes to investing in marketable securities, stock screens and friendly idea sharing appear to be the most popular. For the socially awkward –myself included– a stock screen seems like a great idea. Setup some mathematical filters and only the worthy shall pass. Then, welcome the internet chat forum. In this realm you can read and plumb other investors’ ideas. Only the insightful shall pass.

What if you want to go still further?

Over the last several years, here is where I have found myself. I find auto email alerts on screens interesting, but not enough to bolster conviction large enough to act in size. I find reading other people’s investment ideas inspiring but sometimes foreign to my own values and motive. There are a lot of ways to make a profit, but it’s the ideas that you can stick with because they simply resonate with your soul that make for good long term investments. So, how do you go deep enough to form enduring conviction?

I found myself becoming fascinated by an industry or an idea. I would buy books and read on the subject. That was great. After about 5-10 books, I was ready for current events. What might I find? Where to go? Screens and other people’s ideas are not usually filtered by gut feel. How to filter for leadership insight? Strategy? Certainly there are some screens but they’re not usually adequate to synthesize true insights. So then what?

I recently opted to go brute force.

I downloaded a list of all companies in an industry and saved it to Microsoft Excel. At the top of a column to the right I created a =COUNTIF() function. I would receive a total count if “x” was in the row -for when I had completed reading their 2020 Annual Report. The list was sorted in reverse alphabetical order (not sure why) and I began at the top.

I went through every single company. I opened up their web site. I navigated to their investor relations page and sought their most recent annual report. If I could find it easily, I opened it and saved a link to my Trello note card on the company. I then began reading… every single word. I took notes. Dug further back into more years when it was fascinating, and moved on to the next company when it didn’t excite me.

That’s it.

I started in August 2021 and finished the entire industry on March 11, 2022.

Somewhere along the way I began to take note of my word count as an indicator of reading time and interest level. (Trello fires off to Slack, and easy enough to copy/paste from Slack to So, I started tracking word count each week and reporting it to my operating partner, Mikel. I invited him to hold me accountable to reading and writing. Recently, I hired an Assistant and asked her to block time for me to assure my reading continued.

During this time I was not exclusive to this industry. I was free to roam about the cabin. However, whenever my interest level wained, I found this structure and industry as a decent default. I was fundamentally interested in how it worked and how various leaders approached the industry. What made this company or person unique compared to the next one? How did their words line up with their financial statements? I did not deep dive everyone, but rather gave a cursory overview of every single one in fairly rapid, and regular succession.

What did I find?

Institutional imperative.

My goodness, many of these huge company CEO’s say the same damn thing as everyone else. Does anyone have a succinct and original thought? Original strategy? Very, very few.

Somewhere about 70% through I became nauseous when reading about the pandemic, over and over again. The unique leader’s letters stood out to an extreme degree. It was as if everyone was pointing at the same few highlights and then the unique leaders pointed to their strategy. Period.

That doesn’t necessarily make them good investments, however. So what did I do? Flagged them for continued study.

Anyways, I’m not writing this to convince you to take this approach, or to brag about how much I read. Frankly, I just wanted to denote the date and time that I “finished” and say that leadership matters. Read and think.

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