Of all the aids promoting your ability to arrive at a correct judgment, none is so important as your skilful interpretation of balance sheets, accounts, chairmen's statements and directors' reports. Other aids may contribute but your own observations and interpretations, sharpened by knowledge, will always re-main the foundation on which to base your judgment.

Comparative statistics, indices and chart analysis may reinforce your findings under other heads, if positive, but these sources of information should be regarded as having confirmatory value only, since they represent market prices which are expressions of investors' feelings and their reactions, as stated above.

Using such a routine of investigation you will be training yourself to make orderly arrangement of the evidence concerning each security and so avoid the indecision resulting from a chaotic welter of ill-digested information. Sometimes judgment can be made on the acts from one of these sources alone but all four should be considered in conjunction for any sound judgment.

The value to you of the first two sources of information will depend on your ability to understand and interpret the information they yield. The third source of information consists of balance sheets, profit and loss accounts, chairmen's statements and directors' and auditors' reports. A grasp of this third source will facilitate your benefiting from the first two.


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