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投資前的精準判讀
巴菲特在年度致股東報告書中隆重推薦！第一本教散戶如何真正讀懂企業公開訊息的經典除了看數字，你更需要從字裡行間看出這家公司的潛藏訊息！從高階主管行為的蛛絲馬跡，蘊藏價值連城的投資機會。解碼上市公司，從看懂管理階層開始！很多投資書談論的是投資心態或是投資技巧，這本書則是教你如何解讀公司執行長的談話、看公司提供的年報，來判斷這家公司到底值不值得投資！作者蒐集了眾多公司的年度報告書，調查裡面提到的用詞類型，整理出成功企業的條件，包括企業文化、商業模式、策略、領導能力、願景等等，並佐以巴菲特的投資哲學，確保讀者能將資產投到真正值得投資的公司。作者發展出一套黎氏評等（Rittenhouse Rankings），這是研究企業誠信的一個排行榜。根據各章節的內容，作者提煉出十二個觀察的重點，然後針對年報中是否有提到這些重點來給分。這是極為有效的投資判別工具，為讀者提供了一套完整的評估上市公司基本面資訊的體系。本書能幫助讀者：解讀上市公司CEO表像下的真實公司經營資訊；通過新聞材料幫助投資者判斷一家公司真實的態度與意圖；從年報與季報中説明投資者分離出真實資訊；發掘地雷股，避免投資血本無歸。【財經名家專業推薦】
384 pages, Kindle Edition
First published January 1, 2012
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Displaying 1 - 24 of 24 reviews
April 18, 2013
Insightful book for investors who often forget the importance of shareholder letters. Sadly, the book is more about his company's marketing than about real utility. It's a good book to browse through and the idea is quite good.
If only someone could find out how many times the word "Rittenhouse" had been mentioned in the book. Daym
If only someone could find out how many times the word "Rittenhouse" had been mentioned in the book. Daym
June 1, 2014
I really wanted to like this book. I think not enough analysts actually read an annual report these days. I thought this book would give me some interesting insights into CEO communication. I was somewhat disappointed. The book does not flow nicely and the chapters are not well summed up at the end. The book is almost a marketing tool for the Rittenhouse Ratings.
I thought about returning the book (Only 60% read, kindle version) and looking for a summary on GetAbstract which I have access to but could not find one. A summary would have probably been time better spent. I could not find a summary so have hung the book to keep as a reference. It is certainly not a useless book but I just think it could have been so much to the point and relevant.
A disappointment.
***UPDATE***
After more thought, I ended up returning the book to the Kindle Store.
I thought about returning the book (Only 60% read, kindle version) and looking for a summary on GetAbstract which I have access to but could not find one. A summary would have probably been time better spent. I could not find a summary so have hung the book to keep as a reference. It is certainly not a useless book but I just think it could have been so much to the point and relevant.
A disappointment.
***UPDATE***
After more thought, I ended up returning the book to the Kindle Store.
March 24, 2022
It's just not very insightful. It's common sense, that a CEO should be trustworthy. If you get confused by what the shareholder letter is trying to coummunicate, watch out. Don't invest if you don't understand the business.
It's not a useless book, but a book is a big time commitment and you're taking a gamble, if it's worth your time, which you can't 100% know ahead of time. Is this book worth 20 hours of your life? I kinda regret it, but I'll try to share a few nuggets:
------------
Here something worth maybe 30-60 minutes... maybe more, if you actually avoid a terrible investment:
"The ratio of facts to fluff is an important indicator of financial integrity and shareholder value."
While you read the letter to shareholders, try to keep track of when the CEO uses clichés and fluff (which the author also calls FOG). Compare this to the amount of actual insights. If too much fluff, watch out.
------------
Whenever Warren Buffett is mentioned in a book these days, it's usually nothing new. Consumers of investing books/material have Buffett quotes coming our their ears :)
But I hadn't heard this interesting (but unimportant) detail: Apparently Buffett first dictates the early idea for his annual letter, then works from there:
"Then Buffett described his creative process: I just sit down in late November and I dictate the whole thing very quickly. It reads like a bunch of garbage when I get it back, but at least it gets my train of thought in a logical formation. Then I clean it up, and I clean it up, and I clean it up. After that I send it to Carol Loomis [of Fortune magazine] for editing. When she sends it back, I almost have to start all over again. The last five percent of it takes about 95 percent of the time."
---------------
All of this is in the first 10% of the book and the rest turned into a slog, where I started skipping sentences and paragraphs. There just isn't much value in reading what the CEO of GM wrote in 2002 or how the CEO of Home Depot praises his staff.
Here is a terrible habit of the author: Whenever she italicized something in an excerpt from a shareholder letter, which she does A LOT, she writes: [author’s emphasis]
This is bewildering! It clutters up the book and hurts reading flow! Let the reader know ONCE in the beginning and we're good. But no. EVERY. TIME.
I did a quick search: "author’s emphasis" is exactly 100 times in this book!!! That's 200 words just for that!
Here's another silly thing. At 71% through the book, this:
"Revenues and sales are called top-line items. If these numbers increase over time, you know that the business is growing, not shrinking. The earnings number— sales minus expenses— will tell you if a company is making or losing money. Reported earnings can be positive or negative."
I have to question who this book is supposed to be for? If you don't know this much about investing, why are you wasting your time reading a book that has the goal of getting an investing edge by figuring out if management communicates better than others?
It's not a useless book, but a book is a big time commitment and you're taking a gamble, if it's worth your time, which you can't 100% know ahead of time. Is this book worth 20 hours of your life? I kinda regret it, but I'll try to share a few nuggets:
------------
Here something worth maybe 30-60 minutes... maybe more, if you actually avoid a terrible investment:
"The ratio of facts to fluff is an important indicator of financial integrity and shareholder value."
While you read the letter to shareholders, try to keep track of when the CEO uses clichés and fluff (which the author also calls FOG). Compare this to the amount of actual insights. If too much fluff, watch out.
------------
Whenever Warren Buffett is mentioned in a book these days, it's usually nothing new. Consumers of investing books/material have Buffett quotes coming our their ears :)
But I hadn't heard this interesting (but unimportant) detail: Apparently Buffett first dictates the early idea for his annual letter, then works from there:
"Then Buffett described his creative process: I just sit down in late November and I dictate the whole thing very quickly. It reads like a bunch of garbage when I get it back, but at least it gets my train of thought in a logical formation. Then I clean it up, and I clean it up, and I clean it up. After that I send it to Carol Loomis [of Fortune magazine] for editing. When she sends it back, I almost have to start all over again. The last five percent of it takes about 95 percent of the time."
---------------
All of this is in the first 10% of the book and the rest turned into a slog, where I started skipping sentences and paragraphs. There just isn't much value in reading what the CEO of GM wrote in 2002 or how the CEO of Home Depot praises his staff.
Here is a terrible habit of the author: Whenever she italicized something in an excerpt from a shareholder letter, which she does A LOT, she writes: [author’s emphasis]
This is bewildering! It clutters up the book and hurts reading flow! Let the reader know ONCE in the beginning and we're good. But no. EVERY. TIME.
I did a quick search: "author’s emphasis" is exactly 100 times in this book!!! That's 200 words just for that!
Here's another silly thing. At 71% through the book, this:
"Revenues and sales are called top-line items. If these numbers increase over time, you know that the business is growing, not shrinking. The earnings number— sales minus expenses— will tell you if a company is making or losing money. Reported earnings can be positive or negative."
I have to question who this book is supposed to be for? If you don't know this much about investing, why are you wasting your time reading a book that has the goal of getting an investing edge by figuring out if management communicates better than others?
April 24, 2018
It did contain a bit too much advertising content for author's company.
Some of the case studies analysis did had questionable logic.
But this book deserved 4 star.
Because this book is the only investment book i knew so far focus on the power of "wording". And the author indeed tried to explain this wording power with a lot of useful quotes and old annual report cases studies.
Admittedly, she hasn't found the perfect solution to read annual reports. As a result of this lack of understanding, the case studies might be not relevant/illogical sometimes, and her wording sometimes can be dry and hard to follow.
But who has found a perfect solution on this topic? Or at least tried to write a good book on this topic? Maybe there is. But at least not in my knowledge so far.
She at least did a good try in a long-time neglected area, with a number of carefully selected quotes and cases for further thinking. This book provides good food for you to think on yourself. In that case it deserves a 4 star.
Some of the case studies analysis did had questionable logic.
But this book deserved 4 star.
Because this book is the only investment book i knew so far focus on the power of "wording". And the author indeed tried to explain this wording power with a lot of useful quotes and old annual report cases studies.
Admittedly, she hasn't found the perfect solution to read annual reports. As a result of this lack of understanding, the case studies might be not relevant/illogical sometimes, and her wording sometimes can be dry and hard to follow.
But who has found a perfect solution on this topic? Or at least tried to write a good book on this topic? Maybe there is. But at least not in my knowledge so far.
She at least did a good try in a long-time neglected area, with a number of carefully selected quotes and cases for further thinking. This book provides good food for you to think on yourself. In that case it deserves a 4 star.
April 9, 2013
Bought book because of Buffetts recommendation, but just did not bought theory that you can forecast future of a company from style of annual letters. Surely it is among important things, but it is faaar from the only thing that influences how a company is going ti perform (or its share price).
August 22, 2018
On the final interview with the department heads of the bank where I was shooting for a position as an assistant portfolio manager 15 years ago, I was asked what I first look for in an annual report. I immediately answered “the shareholder letter”. It still is. Being a CEO letter junkie, the latest book from L.J. Rittenhouse, really strikes a nerve. Reading the book is a constant battle against a heavy dose of confirmatory bias. Nevertheless, “Rittenhouse shows how to make sound judgements (through words) in separating companies that build long-term relationships from those preferring one-night stands”.
Central to the book, and the decade-long effort behind the Rittenhouse Rankings, is the Mungeresque belief that you need several mental models to work out solutions to problems. If you don’t have that you will end up in the trap of “to a man with a hammer, every problem looks like a nail”. The Rittenhouse Ranking model centers around the seven different areas empirically deemed most important in a quest to analyze corporate communications. At its core, it is a point system that aims to grade a business’s likelihood of having a successful sustainable business model by way of analyzing the worded communications out of a company - as opposed to the beaten down track of analyzing companies through the numbers. With a database of over 1000 painstakingly coded annual reports over the last decade, the Rittenhouse Rankings are alone in its kind. Investing between the Lines brings this effort to the public for the first time.
As the centerpiece in the construction of the model we find “Capital Stewardship”, something that delighted John Bogle when he first studied the model: “Copernicus-like, it shows the true position of the sun!” Other factors that are used in the rankings are Strategy-Accountability, Vision-Leadership and Relationships-Candor. “We have bought into an illusion that the bottom line is the only thing that matters. But where does the bottom line come from? Accounting! Where does that come from? Judgement... What determines judgement? The company values and how they reflect the ethical attitudes of the CEO”. It makes total sense, of course, but for some reason – finance’s obsession with being regarded as a brethren of science – numbers have always been held in higher regard than words within the investment community. However, you would have had a harder time separating the year 2000 versions of Enron and IBM by the numbers, as opposed to a thorough read of the CEO letters.
Out of all the critical things to look for in a shareholder letter covered by Rittenhouse, I would highlight a couple: How passionate is the company about meeting the needs of all stakeholders? Also, is the letter written holding candor and sincerity in high regard, or is it merely a long-winded feast of clichés? As they say - using common sense is all too uncommon these days, don’t be afraid to trust yours! Finally: The obsession with formulating illuminating wording has been a common denominator of many great CEO letters, including Buffett’s of course (“financial weapons of mass destruction”), but also those of Coca-Cola’s Robert Goizueta - his 1995 shareholder letter is one of the all-time greats.
As the world is full of failed models but empty of fool-proof ones, this one also has its traps. Here an excerpt from one shareholder letter in 2004: “Generations of families have worked for XX. Similarly, we have customers and [partners] around the world whose parents, grandparents and great-grandparents have been our customers and [partners]. We look forward to serving their children and grandchildren too. Our customers choose us because they know we stand behind them. We must always live up to that promise and earn their trust”. Johnson & Johnson? No, AIG. But again, the game of successful investing means finding tools in order to steadily improve one’s batting average. It ought not to be a quest for The Holy Grail. One major piece of the puzzle, I believe, is to read (between) the lines of shareholder letters.
To omit careful examination of a CEOs message (or lack of) is lowering your odds of long term success. It is also an area where accumulated knowledge counts. So grab that marker...
Central to the book, and the decade-long effort behind the Rittenhouse Rankings, is the Mungeresque belief that you need several mental models to work out solutions to problems. If you don’t have that you will end up in the trap of “to a man with a hammer, every problem looks like a nail”. The Rittenhouse Ranking model centers around the seven different areas empirically deemed most important in a quest to analyze corporate communications. At its core, it is a point system that aims to grade a business’s likelihood of having a successful sustainable business model by way of analyzing the worded communications out of a company - as opposed to the beaten down track of analyzing companies through the numbers. With a database of over 1000 painstakingly coded annual reports over the last decade, the Rittenhouse Rankings are alone in its kind. Investing between the Lines brings this effort to the public for the first time.
As the centerpiece in the construction of the model we find “Capital Stewardship”, something that delighted John Bogle when he first studied the model: “Copernicus-like, it shows the true position of the sun!” Other factors that are used in the rankings are Strategy-Accountability, Vision-Leadership and Relationships-Candor. “We have bought into an illusion that the bottom line is the only thing that matters. But where does the bottom line come from? Accounting! Where does that come from? Judgement... What determines judgement? The company values and how they reflect the ethical attitudes of the CEO”. It makes total sense, of course, but for some reason – finance’s obsession with being regarded as a brethren of science – numbers have always been held in higher regard than words within the investment community. However, you would have had a harder time separating the year 2000 versions of Enron and IBM by the numbers, as opposed to a thorough read of the CEO letters.
Out of all the critical things to look for in a shareholder letter covered by Rittenhouse, I would highlight a couple: How passionate is the company about meeting the needs of all stakeholders? Also, is the letter written holding candor and sincerity in high regard, or is it merely a long-winded feast of clichés? As they say - using common sense is all too uncommon these days, don’t be afraid to trust yours! Finally: The obsession with formulating illuminating wording has been a common denominator of many great CEO letters, including Buffett’s of course (“financial weapons of mass destruction”), but also those of Coca-Cola’s Robert Goizueta - his 1995 shareholder letter is one of the all-time greats.
As the world is full of failed models but empty of fool-proof ones, this one also has its traps. Here an excerpt from one shareholder letter in 2004: “Generations of families have worked for XX. Similarly, we have customers and [partners] around the world whose parents, grandparents and great-grandparents have been our customers and [partners]. We look forward to serving their children and grandchildren too. Our customers choose us because they know we stand behind them. We must always live up to that promise and earn their trust”. Johnson & Johnson? No, AIG. But again, the game of successful investing means finding tools in order to steadily improve one’s batting average. It ought not to be a quest for The Holy Grail. One major piece of the puzzle, I believe, is to read (between) the lines of shareholder letters.
To omit careful examination of a CEOs message (or lack of) is lowering your odds of long term success. It is also an area where accumulated knowledge counts. So grab that marker...
August 13, 2022
Not much substance, and wrong about Facebook
Listed very vague rules about judging a company from their statements and share holder letters. By vague, I mean it didn’t explicitly say what to look for, only in a macro level mentioned “what is good company culture”, etc.
This book quoted some examples to support their views. Such as pick this company X, says X’s statement had this and that, which is a bad sign, and then provide evidence that X stock indeed fell after several months. But we all know, those Cherry-picked evidences aren’t enough.
Also I saw this book’s example about Facebook’s CEO statement and facebook’s post-ipo performance. This book said because Zuckerberg said this empty thing “we don’t build service to make money, we make money to build better services”, not mentioned much concrete numbers, thus according to this book’s theory, these statement strongly suggested this company had issues, and indeed its stock price went down (in 2012s)
But I happened to work for Facebook in 2015. I knew great people (I’d say the best people) there. Facebook had very good user oriented company culture. Also facebook’s stock price is 10x ipo price, and became an almost trillion dollar company.
Also that “we make money to build better services” statement — that’s in my new recruit orientation book. It’s taught to every new employees. I loved that company value so much.
After reading this Facebook example, I can’t trust any other thing this book said anymore.
Listed very vague rules about judging a company from their statements and share holder letters. By vague, I mean it didn’t explicitly say what to look for, only in a macro level mentioned “what is good company culture”, etc.
This book quoted some examples to support their views. Such as pick this company X, says X’s statement had this and that, which is a bad sign, and then provide evidence that X stock indeed fell after several months. But we all know, those Cherry-picked evidences aren’t enough.
Also I saw this book’s example about Facebook’s CEO statement and facebook’s post-ipo performance. This book said because Zuckerberg said this empty thing “we don’t build service to make money, we make money to build better services”, not mentioned much concrete numbers, thus according to this book’s theory, these statement strongly suggested this company had issues, and indeed its stock price went down (in 2012s)
But I happened to work for Facebook in 2015. I knew great people (I’d say the best people) there. Facebook had very good user oriented company culture. Also facebook’s stock price is 10x ipo price, and became an almost trillion dollar company.
Also that “we make money to build better services” statement — that’s in my new recruit orientation book. It’s taught to every new employees. I loved that company value so much.
After reading this Facebook example, I can’t trust any other thing this book said anymore.
April 26, 2020
Hindsight is always 20/20
It seems that this book is focused on post facto communications comparison between companies that did well and companies that didn't. Plenty of companies that exhibit supposed faults ended up performing well. Conversely, some companies that displayed highlighted positive communications performed poorly. Investing in the future is inherently probabilistic. Hindsight studies that neglect type 1 and 2 errors might increase our illusion of control bias but is ultimately unlikely to improve our hit rate.
Constant promotion of author's own company further dilutes whatever value add the book might bring on a standalone basis.
It seems that this book is focused on post facto communications comparison between companies that did well and companies that didn't. Plenty of companies that exhibit supposed faults ended up performing well. Conversely, some companies that displayed highlighted positive communications performed poorly. Investing in the future is inherently probabilistic. Hindsight studies that neglect type 1 and 2 errors might increase our illusion of control bias but is ultimately unlikely to improve our hit rate.
Constant promotion of author's own company further dilutes whatever value add the book might bring on a standalone basis.
February 4, 2024
Very boring. You don't need to read this book to decode CEOs letters. When you read a letter you already know the good CEO. The letters are well written in plain english even a 5 year old can understand. Some of the excellent CEO letter writers are: Warren Buffett, Jamie Dimon, Jeff Bezos etc. Don't waste your time. This book is a sales pitch for buying Rittenhouse Ranking System for CEOs to evaluate their own letters to their shareholders. At that she succeeds because it is recommended by some CEOs.
July 5, 2020
Reasonable book. It contains general ideas and descriptions on a model developed to identify the honesty and candor of the CEOs in their letters and messages. Don't expect to discover an algorithm that you can use by yourself. You will have the general guidelines from which you can get interesting and useful information like what are the elements to look for in a CEO letter, but to apply the model described, probably you will need to pay money to official Rittenhouse Ranking Survey Program.
October 29, 2022
Words matter as you read annual shareholder letters look for authentic and engaging communication. While the book focuses on the authors framework for analyzing shareholder letter, I believe it is still valuable in the case study it presents. We must look for capital stewardship, candor in communicating performance, strategy, leadership, vision and accountability. Also managers who are thinking of the stakeholder dynamics between employees, customers and shareholders.
September 22, 2019
A book worth reading for investors that spend a considerable amount of time going through shareholder letters. The author has done an immense amount of work by providing examples of CEO communication that reflects good or bad on them, but the way in which it is presented got me a bit bored at times.
October 2, 2018
If you are researching CEOS and companies, especially if you're considering buying their stocks, you must read this book. You will learn which CEO to trust and which not too. It could cost you your hard earned money.
February 11, 2019
It’s interesting to read but devoid of any practical usefulness. With a few exceptions, it seems the FOG she warns against is a lagging indicator that explains a price drop rather than a leading indicator that predicts one.
April 26, 2024
Very enjoyable - not just the parts on what to look for in shareholder letters and how to be more discerning, but also the anecdotes from the best businesses in America over the last several decades. An intellectual delight, even if targeted at a particular demographic (investors).
September 25, 2024
What this book provides you is a framework on decoding communications of comanies. It will still be up to you to discern the noise. A good general rule of thumb is to try to look for integrity when investing in companies
August 20, 2018
Talks more about her company and the importance of the process than the actual process
December 30, 2018
Good book.
Good one time read. One must take notes on How to read annual reports. You must trust yourself that you can do better than any analyst.
Good one time read. One must take notes on How to read annual reports. You must trust yourself that you can do better than any analyst.
February 22, 2020
Lots of great ideas on what to look for when reading a CEO's letter to shareholders. I just wish it was more organized; maybe a summary outline at the end?
July 17, 2022
Well worth the time to read to set ourselves a benchmark for identifying well written annual letters.
April 29, 2024
Very good book, but verbose.
December 12, 2021
就企業價值的質化分析來說，這本書的大方向沒什麼問題，針對的面向也沒什麼問題，各個面向提出分析要點看起來也都說得通。但不知怎麼的，總有種作者在用量化的思路在做質化分析。量化提供的是一種可重複的方式，背後有設計者的智慧在裡頭，理論上可用，但實戰上就看個人造化，質化講究的是哲學，能一以貫之的智慧，只能點，不能教的。這本書真的很認真在教質化分析
March 4, 2014
I picked up a few pointers from this book ,and invested. I must say, that the investments so far, has been positive, and encouraging. I hope that readers will find it as helpful as it did for me.
August 7, 2017
In depth exploration of how management projects underlying opinions and expectations about their business. Gave me a lot to think about in analyzing startup communications and investor updates.
Displaying 1 - 24 of 24 reviews