Overview

"A soap opera in black and white" that's what Hugo Quackenbush, a vice president at Charles Schwab & Co., once called proxy statements. He added, "Management has to disclose all the stuff they don't want to and investors can get more of the texture and flavor of a company reading the proxy statement than the glossy annual report."

In 2000, I decided to attend the shareholders' meeting of a small cap company I owned shares in. The company was in the Internet space and its value had dropped like a rock, along with most of the rest of the sector. Actually, the main reason I attended was that the meeting was local, though it was still an hour's drive, in the middle of the L.A. rush hour.

I was only five minutes late. But the meeting was already over! I shouldn't have been surprised. For small companies, the annual meeting can often be a mere formality, since shareholders rarely show up. I was the only shareholder at the meeting who was not an officer or director or family member. True, they served coffee and donuts so the trip wasn't a complete waste.

Furthermore, I had face time with the management of the company. They were definitely upbeat and had many initiatives in the works. I got their business cards and was able to keep in contact with them afterward. How did the stock do? In a year and a half, it increased 700 percent.

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