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Friday, April 9, 1999

It's Annual Report Time!

by rdcameron@home.com

It's annual report time and daily my mailbox is filled with gorgeous, full-color glossy documents with many pretty pictures of important executives and wonderful prose extolling the virtues of this or that management decision. I confess to not reading most of them, not because I am not interested in the companies I own, but because I find them to be generally puff pieces. However, I am sure the Wise mutual fund managers love them.

The annual reports do, however, create one pretty strong emotion in me: Wow! How much did this thing cost to print and mail?! I would guess that most of these annual reports cost $5 or more each just to print, to say nothing of the management, writing, editing, and production costs. All this to tell me at the end of March how the company did for the year ending December 31.

So what a surprise to get my annual report from EMC Corporation (NYSE: EMC). They are my third largest investment and I personally believe that they are an extremely well-managed company. This belief was reinforced by the annual report because, well, there is no "Annual Report." The company simply sends out a copy of the Form 10-K (the exact same document they file with the SEC). It is printed on cheap white paper and probably cost no more that 50 cents to print. As far as writing and production and editing, there is ZERO incremental cost (they MUST write this document for the SEC anyway). Because it is the official SEC document, the document is highly factual and filled with real numbers (you probably have downloaded Form 10-Ks from Edgar online anyway). The only disappointment is that there are no glossy pictures of the CEO. In fact, there isn't even a letter from him telling us how wonderful the company is -- I guess they believe in letting the numbers talk.

I am certainly much more comfortable with a company that sends me an annual report like this rather than one that sends me one costing zillions of my dollars to produce just to stroke the ego of the CEO.

Now, if they could just get the SEC to let them count posting it on the website as meeting the distribution requirements, they would save more money. Because, in fact, I didn't read the EMC report when it came in the mail. I downloaded it and read it on March 11 from the SEC Edgar site.

Kudos to EMC for spending my money Foolishly.


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