(This report is part of our occasional Other Vices format, as we run across interesting investment ideas or practices from outside our firm. Today’s piece is written by David Zion, founder of the Zion Research Group, an independent research firm focused on accounting and tax issues, and his colleagues Ravi Gomatam and Ben Wechter. It is excerpted from Zion’s annual 10-K Checklist, which includes tricks of the trade, potential red flags, questions to ask and common-sense tips to help you navigate the 10-K filings.)

Few investors other than Warren Buffett, perhaps, enjoy reading SEC documents, but they are crucial to a complete understanding of the company whose shares you are considering.  Buying a stock without reading the 10K is like driving to an unknown destination without a map.  You can do it, but it’s better with navigation. Zion Research Group is expert at deciphering corporate SEC filings.  To help you navigate this thicket, we are running excerpts from Zion’s reports about 10Ks. This is the first of three.

MD&A 

The Management Discussion and Analysis (MD&A) is where you get to have a look at the results of operations and the financial condition of the business through the eyes of management. (If it’s blurry, be careful, put...

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