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Management Discussion and Analysis (MD&A) - This is where the management of the company get to "talk" to the shareholders. The formatting of the early sections of the 10-K are more or less mandated by the SEC. So when reading those sections, the language might seem overly legalistic and dry.

MD&A may be straightforward, to the point, informative, and open. I've read some discussions where the CEO was not afraid to predict next quarter’s growth would be. (And the next quarter was pleased to announce that the prediction was met.)

I've read some CEO's who were not afraid to admit when they made errors in judgment and what they were doing to correct their mistakes. On the other hand, I've read many 500-page 10-K's that I could not begin to interpret. I've read some 10-K's that felt to me that the preparer had little interest in being transparent – consequently I have little interest in such companies.

I focus on companies with transparent statements. I also look for good quality of earnings.

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