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I N V E S T I N G B A S I C S Wednesday, November 22, 2000 benjamin.rogers@enron.com _________________________________________________________________ REGISTER TO BECOME A FOOL -- GET FREE STUFF! http://www.fool.com/m.asp?i=3D207896 _________________________________________________________________ Sponsored By: Away.com Discover the world's most extraordinary travel destinations! Get stunning photos and interesting travel facts delivered to your inbox. Click for Away.com's Daily Escape newsletter! http://www.lnksrv.com/m.asp?i=3D207897 ASK THE FOOL This weekly e-mail offers answers to questions that perplex most beginning and intermediate investors and throws in an investing-related lesson, as well. Enjoy! -- What causes mortgage rates to rise and fall? -- A. They fluctuate along with other interest rates. Interest rates are affected chiefly by inflation and the market for debt (notes, bills, and bonds, among other instruments). With inflation extremely low in recent years, we've enjoyed low interest rates. But if signs of inflation begin to pop up, it's expected that the Federal Reserve, led by Alan Greenspan, will hike up short-term interest rates via an adjustment in the rate of interest on "federal funds." The "fed funds" rate is the rate of interest a bank can charge another bank for use of its excess money. The Fed can also change the "discount rate," or the rate paid by a bank to borrow short-term funds from the Fed. The prime rate and other rates (such as mortgage rates) are based primarily on these two interest rates. The Fed raises these interest rates when the economy appears to be growing too briskly, which can spur inflation. When the economy is sluggish, it might cut these rates in order to give American enterprise a boost. Lower rates give companies and people (including house-shoppers) an incentive to borrow money. However, remember that the money markets themselves (basic supply and demand for money at each price point) exert the biggest influence over interest rates, though the Fed is a big influence on market expectations. -- Q. Where online can I access earnings reports that companies file with the SEC? -- A. Many Web sites, such as ours, include access to these filings in their stock data offerings. But you can also go right to the source at sec.gov or freeEdgar.com. http://www.lnksrv.com/m.asp?i=3D207898 http://www.lnksrv.com/m.asp?i=3D207899 Got some questions of your own for the Fool? Head to our Help area or post your question on the Ask a Foolish Question discussion board. http://www.fool.com/m.asp?i=3D207900 http://www.fool.com/m.asp?i=3D207901 _________________________________________________________________ INVESTING BASICS - GATHERING COMPANY INFORMATION You're intrigued by Wookie Cookies Inc. (ticker: CHEWY) and being a good Foolish investor, you want to research it. Simply give the firm a jingle and ask the investor relations department to send you an investor information package. (They're free!) Tell them you'd like to receive the most recent annual report, the latest 10-K and 10-Q reports, any recent press releases, and any available analyst reports. Alternatively, you can save a few trees by gathering the information immediately online at freeEdgar.com. http://www.lnksrv.com/m.asp?i=3D207902 The annual report will probably feature glossy photos of smiling customers (or assorted alien life forms) chomping on cookies. But look to the back of the report where the numbers will tell you the real story about the business. There are three main financial statements there. The income statement shows the company's sales and profits. The balance sheet lists assets and liabilities, such as cash, inventories and debt. The statement of cash flows reveals where cash is coming from and going to. These statements also appear in the 10-Q and 10-K reports. The 10-K is issued once a year, along with the annual report, and 10-Qs are issued thrice a year, at the end of the intervening quarters. The 10-Q summarizes quarterly performance, while the 10-K features a lengthy discussion of the firm's operations and challenges. Financial statements reveal how quickly sales are growing, how the company is financing its growth, how much profit it's making, and much more. Pay attention to trends, to see if the firm's financial health is improving or declining. Compare the company with its industry peers, to see how it stacks up. Remember that you can improve your chances for success if you're actually a consumer of Wookie Cookies and are familiar with the company's offerings. Also, talk about the business with other investors, perhaps in an investment club. Don't neglect online resources. Most company Web sites feature an investor information section, with press releases, financial statements, annual reports, and answers to frequently-asked questions. Investor information sites like ours at fool.com also offer a wealth of information on companies and communities of investors sharing information. http://www.fool.com/m.asp?i=3D207903 _________________________________________________________________ IN THE SPOTLIGHT -- Fool writers reveal how they go about researching companies. http://www.fool.com/m.asp?i=3D207904 -- Look up the best interest rates for mortgages, car loans, and bank accounts. http://www.lnksrv.com/m.asp?i=3D207905 -- Struggling with credit card debt? We've got a bunch of tips to help you dig out. http://www.fool.com/m.asp?i=3D207906 _________________________________________________________________ A NOTE FROM THE AUTHOR=01( I hope you're finding this product useful. The content originally appeared as part of our nationally syndicated newspaper feature (which I also prepare). Consider giving your local editor a jingle and suggesting that they think about carrying the Fool. http://www.fool.com/m.asp?i=3D207907 Selena Maranjian http://www.fool.com/m.asp?i=3D207908 _________________________________________________________________ My Portfolio: http://www.fool.com/m.asp?i=3D207909 My Discussion Boards: http://www.fool.com/m.asp?i=3D207910 My Fool: http://www.fool.com/m.asp?i=3D207911 Fool.com Home: http://www.fool.com/m.asp?i=3D207912 My E-Mail Settings: http://www.fool.com/m.asp?i=3D207913 Sponsored By: Away.com Discover the world's most extraordinary travel destinations! Get stunning photos and interesting travel facts delivered to your inbox. Click for Away.com's Daily Escape newsletter! http://www.lnksrv.com/m.asp?i=3D207914 ARE YOU ENROLLED IN WIRELESS 201? Don't miss the sequel to the best-selling report on Soapbox.com http://www.lnksrv.com/m.asp?i=3D207915 FREE BOOK FOR FOOLS ONLY! Investor's Business Daily will send you a free copy of 24 Essential Lessons for Investment Success when you sign up for a free trial subscription of their newspaper. http://www.lnksrv.com/m.asp?i=3D207916 BECOME A FOOL! Get a FREE Investing Guide and more... http://www.fool.com/m.asp?i=3D207917 FOOL DIRECT E-MAIL SERVICES Need to change your address or unsubscribe? You can also temporarily suspend mail delivery. Click here: http://www.fool.com/community/freemail/freemaillogin.asp?email=3Dbenjamin.r= ogers @enron.com Have ideas about how we can improve the Fool Direct or new e-mail products you'd like to see? Try our discussion board: http://www.fool.com/m.asp?i=3D207918 ____________________________________________________ © Copyright 2000, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. MsgId:=20 msg-19908-2000-11-22_11-01-54-397142_5_Plain_MessageAddress.msg-11:10:57(11= -22 -2000) X-Version: mailer-sender-master,v 1.84 X-Version: mailer-sender-daemon,v 1.84 Message-Recipient: benjamin.rogers@enron.com
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