When I was recently skimming a number of articles about companies on the stock market that we were evaluating, I happened on one about the company that my husband works for. I knew that he had enough exposure to company management to be able to tell me if he agreed with the stock analyst’s conclusions. I proceeded to read excerpts to him to get his reaction. He gave responses, without giving details, that caused me to question the article several times. It was an interesting exercise in putting such news and evaluation of trends and business deals in perspective.
It made me wonder. How could other people do this? How could they get some insight about how easy it is for these writers to misunderstand what is happening in a company. Or maybe to see that in an effort to write vividly, the writer strays too far from precise vocabulary? Based on my simple experience, this could be done in a few minutes with minor preparation. Again, it doesn’t involve asking for someone to divulge company secrets. Even in my interchange with my husband, I did not learn anything new about the company.
I suggest surveying your locality for what corporate businesses exist locally. You’d be surprised. If you aren’t sure, it is easy enough to look up websites for most. They might be part of a larger entity. Another option is to think about what companies people you know work for. Some people work remotely. Or you might search for an article in the paper about a local company. It doesn’t need to be a company that you are interested in purchasing stock in. It doesn’t absolutely have to be a corporate company. Just one that you can read an article on AND then be able to do what I describe next.
Then, think about who you are acquainted with. Do you know anyone that works for this company, and who might know enough about how it works, that might be willing to talk about the article with you? You can assure them that you don’t expect them to reveal any secrets or explain all the inner workings of the business. If you belong to a local investing group, some of them might have the background or connections to help. Or they might be looking for ideas for a guest speaker who could basically do the same things with the whole group.
Once you have this figured out, make sure you have a fairly recent news article about the company to read. Make a few notes and highlights about major events or decisions that have been publicized that you can get this person’s reaction about. Read the whole article together, or just certain sections, which ever both of you prefer. Tell them to interrupt with input and responses whenever they like. Take note of how their perspective differs from the information in the article.
By the time you are done, you should be getting the idea that sometimes news articles are like playing the game rumor and the 6 people in any 2-way communication. There is what you thought you said, what you are trying to say, what you really said, what they think you said, what they think you are trying to say, and what they heard. Okay, I just summarized those from memory, but you get the idea. You can’t just trust all the articles that analysts write, for various reasons. Learn about the companies fundamental qualities, read a number of things, and make as educated a decision as you can. But don’t get bogged down in one article that claims this or that, even if it sounds like a straightforward press release. So did some of the statements that my husband ‘clarified’.
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