The waiting room and Best of Web…
We take a break from our usual trawl through the filings in anticipation of the SEC’s “major announcement” about XBRL (there’s a video link here). Though the press conference, which promised “CEOs, and other representatives of SEC filers, accounting firms, technology firms and investors” was supposed to start at 10 am, it’s clearly running late, judging by the background noise and the sound of someone using large amounts of masking tape (and a discussion about the tape, too, which is beyond fascinating!)
While I wait, I thought I’d share some exciting news about footnoted.org, which made Business Week’s Best of Web list. What’s interesting is that footnoted didn’t make the list for blogs, but for financial sites (it’s slide No. 4), putting it in the same category as slightly larger sites (with significantly larger staffs) including the WSJ, Bloomberg, and Marketwatch. Footnoted continues to rely on the generous support of its loyal readers. I hope you’ll use this opportunity to make a donation using the buttons to the right.
I’ll be back later with my thoughts on the major announcement.
UPDATE: I freely admit that I may be missing something and to be sure, footnoted spends more time focusing on weird text strings than funky numbers, but it’s hard to get all that excited about today’s news, especially since it seems like just another step in the process. Even the press release said that “investor-friendly financial reporting moved closer to reality today” as opposed to was already here.
My favorite part was when David Gardner, of The Motley Fool, asked a question about what Sally Q. Fool should make of today’s news. Sally, David hypothesized, was a time-pressed single mom. Without missing a beat, Chris Cox shot back that Sally “will have a lot more time to spend with her kids” now that XBRL is here, since she won’t have to try and figure out which SEC filings to read and what numbers to look at in the filings. We’re all for making things easier here at footnoted, but it’s hard to believe that Sally Q. would really get all that excited about XBRL.
Here’s another view on today’s news from the folks at Financial Executives International.
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September 25th, 2007 at 5:15 pm
Congrats on the BOW, Michelle!
I agree the announcement is a underwhelming regulatory milestone. Many institutional investors are ahead of the SEC, the interesting applications are not to be found at the SEC. In regard to Sally Q, in the short run, I see no near-term benefit to retail investors; the benefit accrues instead to professional fundamental analysts who have time to process the tools.
Some of our analytical heuristics can be (are being) automated. What I mean is, some of what you do here at footnoted.org is apply heuristics to situations, developed implicitly over the years (e.g., a 280g tax gross up)- fundamental analysts do a lot of that with valuation/risk; e.g., a retail analyst looks for DSO deterioration. It is very powerful to pull the loose document thru the XBRL into an analytical template.
September 26th, 2007 at 10:09 am
A reader who has familiarity with XBRL who is unable to post under his own IP address sent this to me last night and has agreed to let me post it:
I haven’t ‘bought the dream.’ As you suspect based on your post, it will most benefit the SEC and the
big analyst houses. The data providers (like EdgarOnline) are lining up at the trough, too, inconsistent with the notion that Sally would reap huge benefits through bypassing them. It’s quite cumbersome and
requires a pretty significant investment in learning about it to use it effectively (and software tools will not solve that).
September 26th, 2007 at 12:16 pm
Part of that is right: clearly it benefits institutions over retail investors. Unfortunately, the un-level playing field persists.
But ‘cumbersome’ requires explanation; ’significant learning’ is implied: so do Adobe Illustrator, Flash and Photoshop CS3, yet professionals chomp them up.
New technologies typically encounter resistance from those who only extrapolate from past practices. If it is cumbersome, then so is XML – and to refute XBRL you have to explain why this particular industry ‘vertical’ (financial reporting & analysis) will not be reaping the benefits of an standard version of XML, like other verticals. (hint: it is unlikely, in the long run). And your anonymous commenter is wrong about the tools: I’ve demo’d and seen demos, when you look at the applications of XBRL (i.e., the tools for non-geeks), you see how easy it is to learn. Yes, to build XBRL requires learning (like coding VBA in Excel), but running XBRL applications is perfectly within the toolset of the average professional analyst.
September 26th, 2007 at 12:21 pm
Sorry to append…
For those who are interested, I have a free 25-minute tutorial that introduces XBRL @ http://www.bionicturtle.com/tools/tool/introduction_to_xbrl/
(Michelle, I hope you don’t mind?)
It does not sell anything; CFAs can earn 0.5 approved professional development credit.
Thanks, David Harper, CFA, FRM
http://www.bionicturtle.com