When I began working as a securities analyst, I noticed that my more experienced colleagues–and especially the most accomplished–had a peculiar reading habit. They might glance over the front-page headlines and skim the articles. But they spent most of their time in the back half of the paper, studying smaller pieces about more obscure economic developments or about small-cap companies.
Why do so?
reading back to front
Their idea, which I quickly adopted, was that the headlines dealt with well-known topics, whose importance was most likely already fully factored into stock prices. The most important thing for an analyst, on the other hand, is to uncover information that is not yet discounted. That means, of course, going beyond newspaper coverage. But as far as the newspaper as a source of new ideas is concerned, it means reading the back half much more carefully than the front.
I, too, soon began reading the paper from back to front.
In the online world, that’s hard to do, for two reasons:
–during the day, stories are constantly being rearranged, with the most-read (arguably the least valuable for us as investors) being pushed forward to the beginning pages and the least read gradually fading further and further back. In addition,
–there’s no easy way to jump to the back of the queue, where the potentially financially valuable news should be increasingly piling up.
physical paper vs. online
The easiest way I’ve found to deal with the problem of online curation is to read the physical paper instead. However, that isn’t always possible. Luckily, if you hunt around on major newspaper websites, you can find an option that lets you read the news in the form the original editors laid it out for the physical paper, that is, without curation. To my mind, that’s not as good as jumping directly into the stuff few people are paying attention to. But it’s better than having to wade through the larger piles of non-investable stuff that the online edition creates as a “service” to us.