XBRL (extensible Business Reporting Language)

Currently when retail investor wishes to do its own financial analysis on companies, he will have to:
1.Download many quarterly, annual reports (often in PDF format)
2. Key in the financial items on spreadsheet
3.Making relevant adjustment based on financial items
4.Analyse in the format of ratio, table, graph etc.

Though steps 3 and 4 can be automated easily,
steps 1, 2 (especially step 2) are the tedious and time-consuming steps.
It becomes a deterrent for retail investor to do its own financial analysis (assume he has the knowledge on how to do one).

Imagine in the not-so-distant future:
The second when quarterly/semi-annual/annual report is available,
it can send you an alert telling you that there are new information;

you open your PC/laptop/mobile, the new data is incorporated into your previous financial analysis.
Based on pre-customised software settings. it automatically calculates ratios, draw out tables, charts etc for your perusal.
A searchable, updated database of companies (for examples those that met certain pre-defined investment criteria) is readily available.

Financial analysis on invested companies becomes common. Even a layman can do it, they just have to get a analysis software or a securities company with such software (but he needs to have slight training on that).

Came across this development in investment field that may make this possible:
XBRL (extensible Business Reporting Language)

Some presentation materials that are useful:
XBRL website
IASB website on XBRL

Read from one of the articles, Microsoft Office has already a Prototype to facilitate XBRL use:
Microsoft Office Tool for XBRL Prototype

Saw news that US and China are going to implement this XBRL.
My wishes are that Malaysia and Singapore are implementing this XBRL soon and there are securities companies who offer the analysis software to his clients free :-)

Beware of bankruptcy – bank (2)

Prevention is better than cure.
Instead of relying on getting Deposit Insurance after bank went bankruptcy,
it will be better if we can detect when certain banks are going "bad".

Found this "Examiner’s guide to Problem Bank identification, rehabilitation and resolution" from
Comptroller of the Currency Administrator of National Banks, US:
PDF file

The part "Problem Bank Identification" and "Accounting Issues in Problem Banks" are particular useful.

Some of the red flags mentioned (the "guide" teaches on details of these red flags):
1.rapid growth/aggressive growth strategies
2. deterioration in economy
3. management/oversight deficiencies
4. inappropriate limits on OCC access to bank staff and documents (applies to US, in simple term, not letting enough "regulator"’s access to bank staff and documents)
5.risk management deficiencies
6.significant off-balance-sheet exposure
7. asset quality deterioration
8.significant ALLL (Allowance for Loan and Lease Losses) and asset valuation adjustment issues
9. strained liquidity
10.insider abuse and fraud

Beware of bankruptcy - bank (1)

What if banks, where we put our money inside, bankrupt ?

Money we deposit in banks are guaranteed to certain extent by Deposit Insurance.
See below for details of Deposit Insurance for Malaysia, Singapore and US.

Note which are the institutions under cover, type of deposit products covered and amount of the coverage..

PIDM (Perbadanan Insurans Deposit Malaysia)

PIDM handbook and other resources for download
read the handbook:
total coverage is 60k per depositor per member institution;
one good thing is joint accounts held with different people enjoy separate coverage limits, wow !

Examples of calculations
Quiz have some fun:-)

SDIC (Singapore Deposit Insurance Corporation)
SIDC website
coverage is 20k, aggregated (including joint account’s share) and net of liabilities.

FDIC (Federal Deposit Insurance Corporation)
FDIC website
Wow, basic insurance amount is 100k per depositor, per insured bank.. Generous :-)

IADI (International Association of Deposit Insurers)
IADI website
We can find list of countries with a deposit insurance system

Beware of bankruptcy

Seeing Lehman Brothers filing for Chapter 11 protection,
it gives a chill..

One of the worst nightmares of investing is "bankruptcy"..
It can affect our financial well-being badly, some examples:

• company invested bankrupt,
• critical supplier/customer of company invested bankrupt,
• bank holding big portion of our savings bankrupt,
• insurance company underwriting our policy bankrupt,
  ….. the list goes on…

For US,
Visual charts about different types of bankruptcy:
Chapter 7
Chapter 11
Chapter 13

http://www.bankrupt.com/
Its "Troubled Company Reporter" (Asia Pacific, US, Europe) is useful..
We can look for potential problematic companies news here..
(though not sure whether the database is complete)

Web BRD (Bankruptcy Research Database)
website
A website to do Bankruptcy Research :-)
(to be continued….)