The Right Tool

I wanted to take a short break from the bank analysis series because I woke up this morning ecstatic.  My Morningstar Document Research trial run just started. It was like Christmas, and I was ten years old running to play with the toy I’d had my mind set on for weeks.

Finding the right tool after years of using the wrong ones ranks somewhere between running to the top of Philidelphia landmarks with your hands above your head and escaping a life sentence in a Maine prison by crawling through five football fields of smelling foulness then relaxing on the beach in Zihuatenejo.  I had put off using Morningstar Document Research (formerly 10K Wizard) for awhile as the price seemed a little on the Richy Rich side as opposed to the young and scrappy entrepreneur side.

However, after a few hours of using it, I don’t think I can ever go back.

Dreaming of Differences

I’d been dreaming of some version of their compare view tool ever since I read the line in Financial Fine Print that the growth of the footnote is as important as the footnote.  You want to see how the fine print changes from year to year, and growth in a section of financial fine print is like an irregularly shaped dark splotch growing on your forearm.  You should really have that thing checked out. Opening both documents and comparing them side by side seemed to be the recommended technique for finding and observing such growths.

This just struck me as wrong-headed.  I’m a programmer, and I look at differences (diffs) of code documents every day.  There are some fantastic tools out there that allow you to see who changed the code you’re working on, how they did it, and how you can merge your changes into theirs. It’s a solved problem.  The programs GitX, kdiff3, and Araxis Merge all do a great job of this.

So, it’s no surprise that putting two 100 page documents side by side and comparing them manually seemed like sweatshop intellectual labor to me.  When you know something can be easier, your brain often shuts off and finds subtle ways to avoid the things you should be doing. In value investing, this is a sin (How else are you going to go through a 1962 Moody’s Manual from A-Z?), but in programming, it’s just a sign you need to find a better tool.  The best programmers are really lazy bastards.

The Wonderful Wizard of Morningstar Document Research

When I finally tried out 10K Wizard’s compare view tool, I knew I had found what I had been missing.  You select two documents, tell it to compare them, then ask for it in PDF.  Deleted portions show up in red with strikethroughs, new comments in blue with underlines.  It is a BEAUTIFUL thing.  Here’s why.

A good tool lowers the barrier of entry and even makes chores fun.  It’s what good software should do.  Being able to have every SEC filing in PDF going back to 1994 and even compare different years with a couple of clicks, I just had to cry it was so much easier than my hacked process of converting html to pdf and looking for pdf tools to display differences.  10K Wizard is expensive, but it’s worth it ultimately as it saves me hours of work, helps me catch investment melanomas, and most importantly, it makes me want to read SEC filings even more.

However, the compare view tool isn’t perfect.  On large documents the coloring gets confused between pages, but I didn’t find it too hard to parse even without the coloring.  Sometimes it gets a little dazed and confused and makes some rather illogical groupings, but most diff tools suffer from this.  It doesn’t diff any of the selected financial table data, but I was fine with that as I just wanted a better way to read the fine print.  It also had a few issues when displaying on the iPad, but converting the diff documents to PDF ironed all that out and I was happily annotating them in Aji Reader. ( Read my previous post on why annotating is so important. )

We have hyperactive brains that don’t always eat their vegetables, workout in the morning, floss, or catch up on their SEC reading.  Finding a tool that’s actually a joy to use is a great way to counteract an irrational, procrastinating mind.

Now the only problem is once the shininess has worn off in a few weeks, I’m only going to see the glaring bugs and possibly start ranting again, forgetting what my world was like before the compare view option walked into my life.

For now though, I’m enjoying the honeymoon period.

Full Disclosure: No position in MORN and have no association with Morningstar Document Research.  I just like complimenting useful tools when I see them.

Photo Credit: / dpfowler