Are securities regulators in Canada finally pulling up their socks? Don’t count on it
If you’ve never read the income tax note in a company’s annual report, you’re not alone. Many portfolio managers and sell-side analysts don’t bother, either. It’s a mundane and coma-inducing part of the financial statements. So you won’t like this advice: read the tax note.
Nobody ever tells investors that financial industry regulation is a business, too. Unfortunately, that’s the reality many wronged investors come to realize after they get burned by lax securities enforcement or weak accounting and auditing rules. Advisors only need to follow the money to understand why there isn’t greater protection for their clients’ investments.
Advisors in the proprietary and HNW segments often tell us they need more than just the research and marketing support their in-house analysts provide. They’re looking for approaches that will give them a leg up.
It’s a question we get a lot from advisors: Can you trust the cash flow statement? The answer is no. The question usually arises after a discussion of how untrustworthy the income statement and balance sheet are. What follows is an even longer discussion about how untrustworthy the cash flow statement is.
It’s certainly no easy task for advisors to avoid portfolio bombs like Sino-Forest Corp. and Armtec Infrastructure Inc., both of which lost over 80% of their value recently. The reasons for the losses are different, but the pain is still the same. Up until mid-April, Sino-Forest stock (TRE) was humming along quite nicely. It had […]