The best advice I ever got was on a airplane. It was in my early days on Wall Street. I was flying to Chicago, and I sat next to an older guy. Anyway, I remember him as being an old guy, which means he may have been forty. He told me to read everything. If you get interested in a company and you read the annual report, he said, you will have done more than ninety eight percent of the people on Wall Street. And if you read the footnotes in the annual report you will have done more than one hundred percent of the people on Wall Street.
I realized right away that if I just literally read a company’s annual report and the notes - or better yet, two or three years of reports - that I would know much more than others. Professional investors used to sort of be dazzled. Everyone seemed to think I was smart. I later realized that I had to do more than just that. I learned that I had to read the annual reports of those I am investing in and their competitors annual reports, the trade journals, and everything that I could get my hand on. But I realized that most people do not bother even doing the basic homework. And if I did even more, I would be so far ahead that I would probably be able to find successful investments.
