Red Flags: Watch For These Words In SEC Filings
Vito Racanelli writes an interesting article in Barron's on phrases that may spell trouble for investors:
"ANYONE WHO HAS SLOGGED THROUGH THE legalese of a thick Securities and Exchange Commission filing knows the devil is often in the footnotes or the appendix. A good rule of thumb, particularly for adverse corporate information, is that the further back in the report, the more important the information. The urge to skip sections of a 100-page 10K is a strong one, but you do so at your peril."
"Now that most regulatory filings are easily searchable on the Internet, investors can troll through the documents for key phrases suggesting something could be amiss -- let's call them dirty words."