We discuss the quality of language used by companies in their annual reports and other investor communication, and suggest why this may be a result and indicator of governance or mis-governance.

In August 1998, the US stock market regulator, Securities and Exchange Commission (SEC) released a book called A Plain English Handbook.

Now, you may wonder, “What business does a stock market regulator has to focus on plain English?”

The SEC released this handbook to show corporate managers, especially CEOs, how they could use well-established techniques for writing in plain English to create clearer and more informative disclosure documents like annual reports, while meeting all legal requirements.

The preface of the handbook was written by none other than Warren Buffett – the man who writes the world’s best shareholders letters – and this is what he wrote –

For more than forty years, I’ve studied the documents that public companies file. Too often, I’ve been unable to decipher just what is being said or, worse yet, had to conclude that nothing was being said.

There are several possible explanations as to why I and others sometimes stumble over an accounting note or indenture description. Maybe we simply don’t have the technical knowledge to grasp what the writer wishes to convey. Or perhaps the writer doesn’t understand what he or she is talking about.
[Read more…] about Corporate Governance: When Words Speak Loud

I recently started a Book Giveaway on Safal Niveshak. The idea was to give away 15 of my best read books on investing and human behaviour.

Around 4,350 people participated in the Giveaway, including a few fake ones like – humma.humma, angoor.khatte, jumma.chumma, naach.basanti, chhota.bheem, tyre.puncture, and junglee.haathi. 😉 Some people would just try to rig the system to win at any cost!

Anyways, here are the 3 winners of the Giveaway, chosen based on the points they had accumulated by sharing the Giveaway and spreading the word about Safal Niveshak…

1. Ravi Kiran
2. Atul Kekan
3. Sanjay Surana

Congratulations to the winners!

Finally, here is the list of 15 remarkable books I am giving away –

1. Liar’s Poker by Michael Lewis
2. The Checklist Manifesto by Atul Gawande
3. Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay
4. Irrational Exuberance by Robert J. Shiller
5. When Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger Lowenstein
6. Think and Grow Rich by Napoleon Hill
7. Predictably Irrational: The Hidden Forces that Shape Our Decisions by Dan Ariely
8. Influence: The Psychology of Persuasion by Cialdini Robert B.
9. The Money Game by Adam Smith
10. The Art of Thinking Clearly by Rolf Dobelli
11. Thinking, Fast and Slow by Daniel Kahneman
12. Fooled by Randomness by Nassim Nicholas Taleb
13. The Richest Man in Babylon by George S. Clason
14. Buffett: The Making of an American Capitalist by Roger Lowenstein
15. Against the Gods: The Remarkable Story of Risk by Peter L. Bernstein

Even if you haven’t won the contest, you’ll do yourself a world of good by buying/borrowing and reading all of these books.

By the way, given the tough competition for the first three prizes, I am happy to award special prizes to the next five people on the list. 🙂

These special winners are –

1. Arpit Lahoty
2. Versha M
3. Murtaza
4. Akhilesh Pathak
5. Vicky Rathod

And the special prize here is an exclusive, Safal Niveshak’s Embroidered Polo Shirt. 🙂

Happy reading!