Kindle and Calibre Presents a Powerful Solution for Newshounds

We recently published an in-depth article covering how investors can use Amazon’s Kindle 3 for reading SEC filings.  The approach outlined in the article can be a viable solution for investors who would like to save paper, but it only scratched the surface in terms of the Kindle’s utility as a newsreader.  While reading newspapers on the Kindle is not yet equivalent to traditional newsprint, the timeliness of delivery and the ability to subscribe to distant newspapers can be quite compelling.  Unfortunately, the cost of subscriptions through can meet or exceed the price of print versions which seems like a poor value proposition.  In this article, we will discuss a way to legally gain access to literally hundreds of newspapers and magazines at no cost.

Calibre E-Book Management Software

Calibre is a free e-book management package that can be downloaded for Windows, Linux, and Mac operating systems.  The scope of Calibre is extremely large but to keep this article to a reasonable length we will not attempt to describe its capabilities beyond its use as a news fetching tool.

One limitation of using Calibre as an automated news fetching solution is that the software runs on your computer and must remain running for scheduling to work.  It would be vastly superior as a cloud based solution.  However, given the fact that it requires the user to host the software, we resurrected a six year old desktop computer running Windows XP with only 512 MB of memory and a very slow processor.  While very slow, the computer is sufficient to run scheduled jobs and will avoid using resources on computers required for other purposes.  All screen shots in this article were taken from this XP system.

Set Up Kindle for Automated Delivery

Needless to say, the computer running Calibre must be connected to the internet, preferably over a high speed connection.  Once the software is installed on your computer and the program is run for the first time, you will be asked a series of questions regarding your e-reader.  While this article covers the Kindle, Calibre supports numerous other news readers as well.

The screen shot below will appear the first time the program is run for users who specify that their e-reader is a Kindle (click on the image for a larger view):

Observe the following points when completing this screen (Note:  We did not use or test the “Use Gmail” or “Use Hotmail” buttons):

  1. Be sure to correctly specify the Kindle email address.  This should be the Kindle address that is set up on when customers purchase a new Kindle and is the same email used to send other documents to the device.  Note that charges a small fee for delivery of documents via the 3G service.  There is no charge for deliveries over WiFi.  For users who have the 3G/WiFi version of the Kindle 3 and wish to avoid charges, be sure to use the “” email address rather than the “” email address.
  2. The Send email from address must be an “authorized” email registered with or the deliveries will not be completed properly.
  3. Calibre states that the system can optionally use a specific server to send emails.  However, we could not get the email feature to work without specifying this information.  This is the same information used to set up email programs like Microsoft Outlook.  Internet service providers should be able to provide this information as well.
  4. After specifying all of the information, be sure to click on the Test email button to make sure the setting are correct.

Select Publications

Now that the email delivery information has been successfully set up, one can select numerous publications for delivery.  To bring up the news download dialog box, click on the “Fetch News” button on the toolbar, as pictured below:

Clicking on the Fetch News button will bring up the dialog that appears below (click on the image for a larger view):

As we can see from the dialog, the system lists available publications by language and contains a count of the number of publications in brackets.  We have expanded the English (China) node to reveal the China Daily publication.  This is an English language newspaper published in China.  If one expands the main English node (with the [291] bracket next to it), all English language sources will be displayed.  Nearly all well known publications are available including The New York Times, Wall Street Journal, The Economist, and hundreds of others.

On the right side of the dialog, we can see that the system provides scheduling options.  In this case, we have specified that China Daily should download every day at 3:00 am.  Clicking the “Download Now” button at the bottom of the dialog will result in a one-time download rather than a recurring schedule.  The Save button at the bottom right of the dialog should be clicked to dismiss the dialog after all selections are made for the publication.

Review Subscription Selections

Clicking on the “Fetch News” button at a later time will bring up the dialog box again and we will now see a node at the very top of the list named “Scheduled”.  The screen shot below shows eight publications that we set up as an initial test of Calibre.  Clicking on any of the individual subscriptions will permit changes to the download time or will allow you to cancel the subscription entirely.

We can see that the subscriptions include well known American publications such as the Washington Post, New York Times, and The Wall Street Journal, and U.K. based The Economist.  The New York Times download requires a user name and password which matches the online registration for the New York Times website which, at this time, is still free of charge.  The Wall Street Journal and The Economist subscriptions requires valid subscriber credentials.  While this restricts access to paying customers of the print editions, at least a separate charge is not required to get the paper on the Kindle.  We have also selected free sources such as the Washington Post, Times of India, Jerusalem Post, and China Daily.  Of course, each reader may select a customized list of news feeds based on their own interests (be prepared to spend hours looking through the dizzying array of choices).

As we alluded to earlier, Calibre can be resource intensive when the program is downloading and formatting the publications.  It can take ten minutes or longer to download and process a complicated publication like The New York Times.  Sending the email to the Kindle can also require some time since the typical large newspaper file may be six or seven megabytes.  The processing time will depend on the speed of your computer and your internet connection.  However, once all the schedules are set up, they can run automatically and processing time is not a major factor.  Note  that scheduled jobs can only run if the Calibre software is constantly left open on your computer.

Publications Viewed on Kindle

Once the publications are delivered to the Kindle, either through clicking on the “Download Now” button or through a schedule, the publication will appear on the Kindle with the familiar “new” indicator next to it.  In all of our testing, the publications appear properly formatted to adhere to the normal navigation features of paid Kindle periodicals.  For example, the screen shot below shows the main navigation screen on the Kindle 3 for The Washington Post:

This is exactly the same navigation screen that one gets when purchasing The Washington Post Kindle edition via except using Calibre does not require the $11.99 monthly charge.  From reading several articles in this publication and several others, it does not appear that any errors occurred in the Calibre process.

Bonus Feature:  Custom News Sources

Alert readers may have noticed that one of the eight publications in the “Scheduled” screen shot above has a title of “Finance and Econ Blogs”.  This is a custom publication that was created by selecting the “Add a custom news source” menu under “Fetch News”.  A screen shot of the “Add custom news source” dialog box appears below (click on the image for a larger view):

While we will not go through all of the steps required to set up a custom news source, the information in the dialog is mostly self explanatory and involved adding one or more feeds to a “recipe” that defines the news source.  In the example displayed above, we have added six blogs to our “Finance and Econ Blogs” news source.  Once this news source was created, it appears in the “Custom” area of the “Schedule news download” dialog and we can subscribe to it just like any other news source.  The result when displayed on the Kindle appears below:

Essentially, this capability provides the ability to generate a “custom” newspaper, delivered on a specified schedule, for any number of blogs or other sources that have RSS Feeds.  The major limitation is that some blogs do not provide full articles through the RSS Feed and instead provide only summary information.  This reduces the utility of the Kindle content, although the rudimentary web browser on the Kindle can theoretically be used to access the full version of the articles.


The Kindle provides an outstanding reading experience but many readers have found the subscription cost of periodicals to be steep when compared to print versions of the same publications.  While the process described in this article may not be for everyone, it provides a viable alternative that can turn the Kindle into a powerful source of news and information delivered automatically at low or no cost.

Retailers ‘Stuck in the Middle’ May Soon Face Extinction

Much of what we do as investors involves studying businesses and critically evaluating the returns that are likely based on management’s competitive strategy.  The elusive search for true “moats” is often frustrated by quick technological change which can make yesterday’s incumbent firm today’s dinosaur.  Investors who pay a rich valuation for a business with a moat must be confident that the advantages leading to high returns today are not destroyed by new types of competition in the near term.

Competition has always been a threat to retailers and numerous strategies have been employed to achieve acceptable returns on investment.  Most investors are familiar with Michael Porter’s work on competitive strategy and the three “generic strategies” firms can successfully employ.  In his well known book, Competitive Strategy, Mr. Porter describes the three generic strategies:  Overall Cost Leadership, Differentiation, and Focus.  This can be translated into a retail context by observing the strategies used to appeal to mass markets, elite shoppers, and niche markets.  A business that fails to develop competitive advantages supporting one of the generic strategies is said to be “stuck in the middle”:

The firm stuck in the middle is almost guaranteed low profitability.  It either loses the high-volume customers who demand low prices or must bid away its profits to get this business away from low-cost firms.  Yet it also loses high-margin businesses — the cream — to the firms who are focused on high-margin targets or have achieved differentiation overall.  The firm stuck in the middle also probably suffers from a blurred corporate culture and a conflicting set of organizational arrangements and motivation system.  Competitive Strategy, p. 41-42

It is not particularly difficult to think of companies that are neither cost leaders nor differentiators.  Usually such companies produce sub-par returns on invested capital but many have historically muddled along for years with incoherent strategies.

The days of muddling along without a clear strategy may be numbered for retailers in the age of the smart phone.  As The Wall Street Journal observed today in a front page article, shoppers are increasingly equipped with mobile phones that not only provide internet access but also often allow instant price comparisons by scanning bar codes on merchandise.  This is surely the nightmare of middling retailers that have long relied on confusion or ignorance to move uncompetitive merchandise.

Earlier this year, Nielsen projected that the smart phone market would exceed fifty percent of mobile phones in the United States by the end of 2011 as the chart below illustrates:

If it is possible to browse through the selection at Best Buy and immediately check prices at or Wal-Mart, pricing pressure is eventually going to drive most business to the lowest cost provider.  Even worse for “brick and mortar” retailers, most online retailers benefit from not being required to collect sales tax in jurisdictions where they lack a physical presence.  Customers who are reluctant to buy products “sight unseen” can then use the infrastructure provided by physical retailers to get comfortable with their purchase and then immediately scan the product’s bar code and order from the lowest cost online provider.

Best Buy recently reported disappointing results and the CEO made comments during the conference call related to competitive pressures.  Shares plummeted in the wake of the results as investors reconsidered the company’s strategic position and competitive strengths.  Retailers such as Best Buy have long competed for business by keeping a wide variety of merchandise in stock and promoting select products in order to bring customers into the stores and allow for cross selling higher margin merchandise.  This strategy may no longer be viable as smart phones begin to dominate consumer behavior in ways that would have been unthinkable just a few years ago.

Physical retailers will not become extinct but they will increasingly be forced to choose a coherent strategy based on a broad offering of very low prices or true differentiation.  While the threat of internet commerce has been a consideration for investors for much of the past fifteen years, the threat has become much larger with new smart phone technology.

Disclosures:  None.

The Investor’s Guide to Amazon’s Kindle 3

Many readers will relate to this scenario:  The printer is hard at work producing a 100+ page SEC Filing when the room becomes strangely silent.  Surely not enough time has passed to signal a completion of the job?  Sure enough, the printer has run out of paper, depleted its toner, or may even require a new drum unit.  The only positive aspect of the breakdown is that fewer fine particles of indoor air pollution are being produced, at least for the moment.  Surely there must be a better way?

Diligent investors are almost always voracious readers, particularly when it comes to primary sources of information delivered in the form of SEC filings.  Until recently, our options for consuming this material involved a choice between reading documents on the computer screen or printing them out.  Reading material for hours at a time on a computer screen is very likely to cause eye strain so the default option has been to print.  With the advent of electronic readers, investors now have a middle ground between the computer and the printed page.  In this article, we will take a look at how investors can use Amazon’s Kindle 3 e-reader to review SEC filings.

Why Kindle 3?

The market for electronic readers has been changing at a rapid pace over the past few years with technology advancing steadily while prices have plummeted.  This is typical in technology and the temptation can be to wait indefinitely since products will only get cheaper and better in the future.  However, at a certain price point, it makes sense to take the plunge even knowing that something better will come along in a year or two.  At a price of $139 for the Kindle Wi-Fi or $189 for the Kindle 3G, the price of these devices is not much more than the cost of a new printer drum unit and toner cartridge.

While the Kindle 3 is a black and white display and lacks the excitement and flashiness of Apple’s iPad or the new Barnes & Noble Color Nook, a major advantage involves the use of electronic ink technology that makes the device just as easy to read as the printed page.  This is particularly important for those who read for extended periods of time and may develop eye strain from back-lit devices.  Other Kindle advantages include a far lower price tag, particularly for the Wi-Fi only unit, and much improved contrast on the latest version compared to the Kindle 2.

What about the Kindle DX?  With a 9.7 inch screen, far more material can be seen on a single page compared to the 6 inch Kindle 3.  However, the price is far higher at $379 and there are two important limitations compared to Kindle 3.  First, Amazon has not included Wi-Fi capability for the Kindle DX.  While the device has free 3G service, Wi-Fi can be faster and also makes it possible to have Amazon convert files and deliver them for free compared to a small charge when delivered over 3G.  Second, the PDF support on the DX is inferior to the Kindle 3 because it lacks annotation capability.  As discussed in a recent blog article, the Kindle DX oddly has a less capable feature set than the Kindle 3.  Paying nearly three times the price of the Wi-Fi Kindle 3 for a less capable product seems unappealing.

Focus on SEC Filings

While the Kindle 3 is a great device for reading books and periodicals, there are many other sources of information on using the Kindle for such purposes.  However, as far as we know, there are no articles specifically dedicated to using the Kindle for viewing SEC filings.  We will focus on two methods to view SEC filings on the Kindle 3.  While both methods have some limitations, we have found that it is a compelling option for reading most SEC filings with a few exceptions.  However, without taking a few special steps along the way, one might incorrectly conclude that the situation is unworkable.  In particular, converting SEC filings to PDF files is not a viable solution on the Kindle 3 because the screen is simply too small and the zoom feature’s navigation is cumbersome.

Method #1:  Convert HTML File to Amazon’s Proprietary Format

The first method provides the best overall experience but requires access to a computer and involves a multi-step process.  As a result, it is not appropriate for those who are using a Kindle without access to a computer.  Method #2 will cover those who are looking for a one step mobile process, albeit one with more limitations than Method #1.

Step 1:  Generate HTML File From SEC Filing

Most readers are familiar with navigating to the SEC Company Search tool and pulling up filings for specific companies.  Enter either the company name or ticker symbol and click on the “Find Companies” Button:

We will now see the results for our search for Sears Holdings:

We are interested in reading the 10-Q filing for Sears Holdings, so click on the Documents button and then click on the d10q.htm link next to the Form 10-Q entry in the list.

At this point, you should see the 10-Q filing for Sears Holdings on your screen.  Normally, one would either read the document on the computer screen or print it out.  Instead, we will save the file as HTML.  While the specific process for saving the file will differ based on your operating system and browser, a screen similar to the one below should appear when working in Firefox on a Windows Vista computer:

Step 2:  Send HTML File to Amazon for Conversion

The Kindle does not provide the ability to view HTML files directly (although it does have a basic browser which we will discuss later).  As a result, we must send the file to Amazon for conversion into the Kindle’s native e-book format.  This results in advantages over HTML since we will gain access to all Kindle features available on any other e-book.

Kindle owners are able to set up an email address with Amazon that can be used to submit files for conversion.  The <username> email address can be used and Amazon will charge a fee to deliver the converted file directly to the Kindle if you are using 3G service, although no fee applies if you are using Wi-Fi.  Those who wish to receive the file on their computer can send the HTML file to the <username> email address.  Of course, you would substitute your Kindle user name for the <username> tag specified above.

Step 3:  Adjust Kindle Settings to Optimize Viewing

Once the converted file has been sent to your Kindle, either via Amazon’s conversion service or by manually moving the converted file from your computer, the document will appear as any other e-book on your Kindle.  Based on the name of the HTML file, the e-book will appear as “SHLD_10Q_Q32010” but of course you can specify any other name as well.

Click on the e-book to open it on your Kindle.  The result will likely be unreadable, but don’t panic!  If you have the Kindle set up to read typical novels in portrait mode, several adjustments should be made to optimize the screen for SEC filings.  Click on the “Aa” button on the Kindle that allows for adjustment of font sizes and select the options below:

Be sure to initially set the font size to the smallest possible setting, the Typeface to “condensed”, line spacing to “small”, Words Per Line to “default”, and select the landscape option for screen rotation.  The result should look similar to the following screen shot which is the first page in the content area of the document (the default chosen by Kindle when you open the file for the first time).  Click on this image to see a larger view:

In order to go to the beginning of the document, use the standard Kindle menu feature to go to the “cover” of the book and you will see the start of the 10-Q document.

Step 4:  Navigating the File

From the screen shot above, it seems like the text is quite small and this is true.  However, when held up directly against a printed document, the font is only marginally smaller than print when set to the smallest Kindle font.  We also have the advantage of the table having highlighted alternate lines, something we do not get when the file is printed directly from the SEC website.

As you navigate through the filing, it is possible to dramatically increase the font size when viewing text or smaller tables.  For example, in the screen shot below (click on the image for a larger view), we are using a font three sizes larger than the smallest to view a section of the financial statement notes.  There is also a relatively compact table that is visible with this larger font size:

When held up directly against a printed version of the same page, the text size compares favorably and is arguably easier to read.  Obviously, far less appears on a single page which could be problematic for more complex tables.  Click on the image below to see a larger view of the Kindle compared against the printed page:

Where the Kindle definitely falls short is when large and/or complex tables exceed the width of the device, even at the smallest possible font setting.  In the Sears 10-Q, the most obvious case was the Consolidated Statements of Equity where we could not see the Total column without scrolling manually to the right.  The balance sheets and income statements appeared without any issue.  The other limitation is a weakness the Kindle has in general related to annotations.  While the reader can annotate a converted document just like any other e-book, the annotations appear in a “clippings” file that can be downloaded to a computer rather than being exportable in-line with the text.

A potential workaround involves printing the consolidated financial statements (usually just a few pages) to get around the width limitation and to keep these figures on hand for quick reference.  In addition, the printed page can be used to take notes on the rest of the document rather than use Kindle’s annotation feature. Overall, the approach outlined above has proven workable for reading SEC filings, with only occasional difficulties with larger tables.  As we move from large tables to areas of plain text, the font size can be further enlarged for ease of reading.  Upon encountering a table, shrink the font size to accommodate the data.

Method #2:  Kindle’s “Experimental” Browser

While our first method is, by far, the most usable option because it creates a native Kindle e-book with all the related features, it does require a computer and a multi-step process.  If you are in a situation where you have internet access on the Kindle but lack a computer connection, this second method can be used as an alternative.

Step 1:  Launch “Experimental” Browser

Amazon appears ambivalent regarding its internet browser, and for good reason because it is quite limited and somewhat of a throwback to an earlier online era.  Nevertheless, it does provide the functionality required to view SEC filings.  Navigate to the Experimental menu of your Kindle and launch the browser.  Enter the following URL:  This will bring up the same screen we looked at before as part of Method #1.  You may want to bookmark this URL for future use.

Follow the same process we discussed previously to bring up the Sears Holdings 10-Q document, except this time do so within the Kindle browser rather than on your computer.  When you click on the “Aa” button when in the browser, there are fewer options.  Be sure to remain in landscape mode to allow for a reasonable amount of width on the screen and, for now, select either the fit-to-width or actual size setting as shown below:

In addition, it can help to use the “Article Mode” feature of Kindle 3 which optimizes the browsing experience.  However, the downside to article mode is that tables are not formatted as nicely.  Experiment with both “Article Mode” and “Web Mode” to see what works best for your purposes.  Both options are available through the Menu button while working within the browser.

When navigating through the document, it is necessary to keep the setting to “actual size” or “fit to width” in order to successfully view most tables within the width of the screen and to avoid horizontal scrolling.  However, when reading text, it is possible to set the text to 150% of the original size.  The problem is that switching between “actual size” and 150% mode does not keep the reader in the same location of the document which can be very disorienting.  In addition, there is no table of contents available to easily get reoriented within the document.

The following image shows what the web browser looks like on a page with text and a smaller table when set to portrait mode and actual size.  The text is rather small but still readable.  Click on the image for a larger view:

While using the web browser to view documents is clearly inferior to converting the HTML file to a native Kindle e-book, it is possible to read documents despite the small screen size and is a viable option for those who are on the road with a Kindle but without a laptop.

Bottom Line:  Kindle 3 Works for SEC Filings

While technology is always advancing and today’s Kindle 3 will seem obsolete in a year or two, the $139 price point for the Wi-Fi only model is too low to pass up given the functionality that the device provides.  In addition to reading regular books and publications, it is possible to use the Kindle 3 to view SEC filings without sacrificing a great deal in terms of readability.

Why not use the Kindle DX or Apple’s iPad?  Either of these products may provide a better solution for some people but both are far more expensive products and, in the case of the iPad, may present problems for those prone to eye strain.  The ultimate e-reader for investors would be a product with a 9 or 10 inch screen and color e-ink support, but such a product is probably two to five years away.  For now, the Kindle 3 seems like a good compromise for those who would like to experiment with e-readers without spending a great deal of money.  Amazon’s 30 day refund policy permits a test run of this process without taking much risk.

Disclosure:  No position in, Sears Holdings, or Apple.  However, The Rational Walk receives a small referral fee if readers click on the Kindle links in this article and purchase the device.