In 2011, legislators proposed a solution to the US Postal Service’s budget trouble: encourage Americans to write more letters.

Well meaning, and yet ultimately out of touch with the way Americans (and the rest of the world) now communicate with each other.

Fast forward to 2015 and some members of the U.S. House Of Representatives are continuing their effort to derail XBRL. Maybe it’s an understandable knee-jerk reaction to the bumps we’ve encountered in the road to interactive data. However it seems particularly shortsighted when you consider the much bigger problem on hand: just like those handwritten letters, 10ks and 10qs are hopelessly out of date. People simply do not consume information this way anymore!

To put it another way, Congress and the companies resisting XBRL should instead be looking at XBRL as the way to finally get investors to actually see any of the reports they labor over for countless hours.

It’s true…the info that we all agree is necessary for investors to make informed investment decisions is being seen by, essentially, none of those investors. Isn’t this a problem?

But, investors prefer the paper based system!

That’s a takeaway from the most recent House Financial Services Committee’s capital markets subcommittee hearing on SEC interactive data.


Are we talking about professional investors? Sure, some read 10-Ks when they have to, but certainly not as a primary step. How do they even know which documents to read? (There are ~9,000 public companies in the U.S.) Or should they just read them all? How do they compare a company to its competitors? Putting eight PDFs on the desk next to each other? How do they build a cash flow model? By copying and pasting the numbers in from the PDF? Please. They use interactive data. In their case it just happens to come from a premium data account (Factset, Capital IQ, Thomson Eikon, etc….). These cost ~$20k a year per person, and still have major limitations. For example, rarely can they show as-reported information, instead preprocessing it to fit inside predefined templates.

Or is this about other investors….like EVERONE ELSE? Like the 15 to 20 million U.S. families estimated to own individual stocks. Do they read these documents? Many don’t even know they exist, or where to get them! Others may still even get them in the mail, piling up on a table by the door until they get around to bringing the recycling bin over. In the meantime they get tiny pieces of the info, second hand, watered down, and pre spun, from folks on CNBC, Yahoo! Finance, and others. It’s no wonder that investors so often seem to be lock step with each other.

How about those same members of congress? They all have investments. Do they go home after a long day and read 42 THOUSAND word 10-Ks on their iPads in the evening while cooking dinner? Let’s ask them.

But the answer is obviously ‘no’. Because, once again, people just do not consume information this way anymore!

In fact, if you wanted to create a system that virtually guarantees that only a handful of 40+ year old people working at Fidelity or Goldman Sachs or related firms have access to detailed financial data, you couldn’t create a better system than the paper based system we have now!

How do you share a portion of a 10-K on social media? You can’t. How do you integrate comments and educational content to relevant portions of the filings? You can’t. How do you quickly find the topics you need across companies or over time? You can’t. Even the almighty Google can’t help you here! (Go ahead, search for your favorite company’s Income Tax Disclosure on Google. Nope…you need to go to and open the PDF.) Investors prefer this?

All we’re asking is keep the XBRL flowing, and we’ll all keep working to overhaul this antiquated system.

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