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I got an invite to this new Wiki but so far I didn't have any time to look at it. My first question is however, how is this going to be any different from Investopedia? Why would I use this one?

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No. of Recommendations: 9
Hi Mark – Thanks for the great question.

That Flossary is a wiki created by an active and informed community is one of the main differentiators. Static definitions can quickly grow stale as the market or the rules change. To use a current example, something caused pauleckler to update the naked short selling page yesterday:

Clearly, he saw something in the news relating to the new rules on shorting financials, or the increased enforcement on naked short selling. This prompted him to check out Flossary’s naked short selling page, and seeing it was very inadequate he decided to improve it. In this transaction, he showed the real power of a community. Right now we have a select few editors we’ve handpicked from our community. As we expand this process to other proven Fools, we’ll see more actions like this one. Imagine a similar chain of events occurring with a group of 100 or even 5 Fools. The information on that page would be as complete, up to date, and accurate as any of the web. We feel other sites treat this type of information as a commodity. Outdated information can be almost as bad as no information at all.

That brings up the next main differentiator: how Flossary compares to other wikis. Just having an active community of people is fine by itself, but when you consider that you and I are part of the oldest investing community on the web, it shows that we can not only create a great quantity of content, but also trusted and accurate information. Readers will have a high level of confidence that what they’re reading was created by a group of financially savvy editors, not just people who specialize in terms starting with A through Z. Since we’re picking some of the best members from the most venerable investing community, we know we’ll create something better and special.

Add in the fact that each term will link to relevant and up-to-date expert articles from These will provide all the various takes on the term which will ultimately help the reader make a decision based on all the information provided. Think of it like a definition and a search mixed into one.

Also consider that FoolHQ’ers will be in the mix helping to keep Flossary definitions relevant. And that very soon we’ll have videos of David and Tom Gardner, Dayana Yochim, Robert Brokamp, and others giving their take on some of the major terms. I don’t know of any of place to get expert videos on important investing concepts like free cash flow.

I truly believe all of these things will help readers pick Flossary over other investing encyclopedias.

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No. of Recommendations: 4
Hi Mark,

Welcome to Flossary...great question!

After all, if Flossary won't be be better than Investopedia, why do it?

Aside from the reasons Jeremy gave, note that the definitions in Flossary will have a Foolish point of view (e.g. we won't be scared to give our thoughts on technical analysis). Also, I believe Flossary definitions will be just plain better than Investopedia.

Want proof? To give you an idea of what Flossary can become, check out the definition for "financial statement" that Jim Mueller (TMFGebinr) blew out:

You'll notice the Foolish love as he explains the usefulness of footnotes and where you can find financial statements on the Web.

I looked for it on Investopedia, but they haven't defined the term "financial statement(s)". That's another advantage of'll provide more breadth of content including the more esoteric terms and even companies.

Hope that's helpful,
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I looked for it on Investopedia, but they haven't defined the term "financial statement(s)".

I knew you wouldn't post this if it weren't true, but I just had to see for myself. I was floored! That's such a simple concept -- and incredibly basic to be missing-in-action.

To expand on why I think Flossary (still hoping we change the name!) will outshine other offerings (like Investopedia), I see it as being a one-stop shop kind of experience. Eventually, the number of "Fools" will grow, they'll already be here on the various boards, reading Fool articles, etc., and when they have a question, they'll be able to access Flossary right where they are.

OTOH, I assume one of the reasons for starting Flossary is that it can be utilized as an avenue to bring more folks to the Fool. Works both ways.

In addition, as already stated, we're looking to make Flossary just a tad less "dry." Investing should be FUN! We hope to make learning about the terms and answering the questions fun, too.

Let's face it... Investopedia is a good beginner's resource (I still look things up there), but it is about as dry as Melba toast. And the definitions are given very short shrift. I sometimes come away from Investopedia feeling none the wiser. Hopefully, Flossary will greatly improve on that.

That said, I do see Wikipedia remaining the huge mountain in the way of Fool domination. :o) The articles on Wikipedia are generally really in-depth and helpful. I hope that Flossary climbs that mountain and then uses the mountain-top as a platform for launching into space.

The various adjunct offerings to the entries being contemplated could make that come true.

I'm honored to be a part of the behind-the-scenes process. (Even for free!)

Best regards,
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Financial Statements: Introduction

By David Harper

Whether you watch analysts on CNBC or read articles in The Wall Street Journal, you'll hear experts insisting on the importance of "doing your homework" before investing in a company. In other words, investors should dig deep into the company's financial statements and analyze everything from the auditor's report to the footnotes. But what does this advice really mean, and how does an investor follow it?


Denny Schlesinger
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Ah, good catch, Denny...I did a search on Investopedia for "financial statements"...nothing good showed up for terms or articles...should have kept looking...your link was under tutorials. Weird that Investopedia doesn't go the extra step and define it as a term...if it was a wiki, I could fix that... :)

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No. of Recommendations: 9
Yeah, their search engine sucks. Also, not to display my ignorance too much, but frankly, I had never heard of Investopedia. I occasionally go to Wikipedia for some financial terms I want to research, but I don't trust what is written on either site to be... how should I say this?

Biased? Pragmatic? Reduced to the point of common sense? (Not a typo, these are things I want.)

I feel that the strength of the Fool community is that we respect readers' intelligent inexperience. We explain concepts in simple ways so someone who has the desire to learn but never took finance or accounting in school can quickly apply the information. I think that the drawback to those other sites is that they don't have an editorial slant that is serious about teaching normal people annoyingly esoteric concepts.

That's what it really comes down to for me. We're researching terms for our practical advantage -- we need to apply it in our daily investment decisions, we want to know how important it is and what we can earn from each item.

Also, Investopedia has a junky search engine. Reading through their description of the balance sheet, I thought to run a search for "capital expenditure" and got nothing. Going to Google and running "capital expenditure investopedia," I instantly got their CAPEX page, which has several words highlighted as links. Those links are not links to more information, but are rather links for paid ads.

In short, if I'm on the CAPEX page, there's no way to find the Financial Statements page from there, even though it probably should be linked, or at least grouped together in a category. It's not even a "related term." Makes sense, right? I had to click through four pages to get to it, but I knew what I was looking for and how to get there. A newbie would not.

These are all things that could be easily corrected in a Wiki (and frankly, those text ads have no place in a reference document. Ads are OK, but they should not be misleading. Clicking on Asset should take you to something defining Asset, not to a 3rd party vendor looking to help you buy/sell Assets. Who pays for these terms anyhow?

So, I think our pages will be better because they're... well, they're ours.

We're not economists or accountants, so we write for ourselves, and we're a pretty important audience.

Let me give you an example of an Investopedia discussion of sales that I heartily disagree with:

For investors, all sales increases are good and can occur as a result of sales growth through more unit volume from existing products/services, the introduction of new products/services, price increases, acquisitions and, for international sales, the impact of favorable exchange rates. However, some increases should be viewed more favorably than others. There's no question that greater unit volume is the best growth factor, followed by product-line expansion and new services. Price increases, especially those above the inflation rate, have their limits, as does sales growth through acquisitions. As applied to companies with foreign operations, the currency translation effect into U.S. dollars, either positive or negative, will even out over time.

So, all sales are good, except some are better than others, huh? How about the sales of low priced, no-money-down, income-unverified ARMs? How about those? Those are sales of services so they must be good, right?

How about sales for rental of 3 movies at a time, with the option to get 3 movies free on return of those movies at a Blockbuster video store, and to charge less than our competitor does for half as many discs? Failed-business-idea-number-2 only seemed like a good idea for a few months and then the CEO in charge of that brilliant plan was sent flying with a boot to the rear. His successor is still trying to clean up the mess.

Still think all sales increases are good? I'm sure we could all come up with several examples in a few minutes from our own practical experience.

Fact is, nothing exists in isolation. Sales are good if lending is kept under control, if current and future costs are kept reasonable in comparison. The Fool community would be able to correct an article like that -- and I think quickly -- so that others who come in later will not be misled by Mr. Richard Loth (the author) and his 38 years of investment banking experience. I've got no years of investment banking experience and I can tell another side to that story.

Our diversity and pugnacious nature make us different, and IMO, better.

<Rant off.>

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All great responses, but I think Har1en deserves a Post of the Day nomination! :)

(Submitted, though I suspect given that it's on a private board dedicated to a project still with its wraps on, it might not win.)

But still....! :)

Fool on,

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Hey Dave!

If Har1en can't have post of the day, we'll give him "Floss of the day" here on our own board.

Rich (haywool)
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If Har1en can't have post of the day, we'll give him "Floss of the day" here on our own board.

You mean like Investopedia has 'Term of the Day' (I subscribe).

Sorry, couldn't resist.

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