Good morning and welcome to Sunday Morning Coffee with Erik.
It is, by my estimation, the worst Sunday of the year: that is the Sunday start of Daylight Savings Time. I just got back from Honolulu last week and was nearly recovered from my jet lag when now I have another jet lag: Daylight Savings Time-induced jet lag. So, I’m going to do just kind of a short Sunday morning coffee presentation today.
Yesterday when we did an Office Hour session with IOI members, we took a look through Nike’s financial statements. I realized that for me looking up financial statements is no big deal, but that perhaps not everybody knows where to find financial statements, so I thought we could take a quick look at how to do this.
I am going to first look for “SEC Edgar” in a search bar. Edgar is the SEC’s official site that takes in financial information from companies and then post those for the public to view.
We click on the Edgar link, then we can choose “Search for company filings.” Then, we want to click on “Look up a company or fund name, ticker symbol, CHK.” Then, I always just do the “Fast Search.”
In the Fast Search box, just type in the ticker symbol and hit search; this brings back all of Nike’s financial information, including any statement that the firm submits with the SEC.
I was looking up annual financial data, so we want to type in “10-K” into the “Filing type” textbox. 10-K is the annual financial statement and 10-Q are the quarterly statements. Clicking “Search,” we find that all of the 10-Ks all the way back to 1995 come into focus and we can just click on one of these documents links and pull up the financial statements as they were submitted at the time.
In addition to Edgar, I also want to show one other place that you can get 10-Ks from, and that is from the company’s investor relations site. So we just type “Nike investor relations” into a search bar, and click on the first result.
Nike has a really nice site by the way, with a lot of good information on it and financial statements back for many, many years. From the main menu, we just select “Annual Reports.” The site gives us a nice splashy picture for the 2016 annual report, but also notice the section that says “Archived Annual Reports.”
From this dropdown, we can see that the statements posted go all the way back to 1981, so we can select that and see what Nike was doing financially in 1981. It’s kind of fun to look at these really old statements and see what people were thinking about and worried about, and how the managers were talking about the business at that time.
This is how to access a financial statement, but after you’ve accessed them, how do you take the information within and make good investment decisions? What can you find within the financial statements that helps you value a company?
Well that is what IOI Training is all about. We have a complementary Minicourse on our site for people who aren’t familiar with accounting statements called “The Language of Business.”
It’s a complementary Minicourse. Just register to be a user on the site, you can take that take that class. Our other courses – IOI 102 especially – talks about how to value a company.
I am a firm believer in something that Peter Lynch said, which was [paraphrased] “Investing in a company without looking at the financial statements is like playing a round of poker without looking at your cards.”
You might win a hand without looking at your cards, but you won’t be able to do it repeatedly and you won’t know you why you won, certainly! The results would be completely random.
Companies do give us a lot of information as investors as to what is happening with their businesses. They give us so much information that we can make a pretty good assessment of the value of those companies. It’s a shame to throw that away to not pay attention to it. That’s precisely what the IOI training helps you do.
Okay thanks for joining me today. I’ll see you again soon!
See the first 10-K published by Nike as a public company – below. Great photo of a young and very intense-looking John McEnroe sporting some spiffy Nike tennis sneakers.