SAN FRANCISCO - Individual investors look everywhere for good ideas -- the media, their neighbors, the water cooler, and so on.

All that's good. But the very best place to look for information on a stock is the information the company itself puts out. In other words, every investor needs to get comfortable reading the filings companies submit to the government. That's where the good stuff is, the data that goes far beyond the news releases.

Everyone assumes the filings are really confusing, and they are. But here are some hints all do-it-yourselfers can use to make sure they've pursued every angle before plunking down their own cash:

Finding financial documents got immensely easier when the Web came along. Every filing a public company makes with the Securities and Exchange Commission is available for free at the agency's Web site. The SEC's site isn't very pretty, however, so it's not all that easy to read. Fortunately, there are plenty of alternatives.

One of the best is www.freeedgar.com. It just recently began requiring a registration, but it's still free to use. The best site you must pay for is www.10-Kwizard.com, which, for $25 a month (or $125 a year), allows much more extensive searches that the freebie sites.

Whichever site you use, if a company truly is important to you, consider subscribing to a "watch list." For a small fee, the site will send you a notice every time your targeted company makes a filing. That's how the pros track their investments, and it's how you should too.

The first documents to look for are the annual reports (10-K) and the quarterlies (10-Qs). That's where you'll find the income statements, balance sheets and cash flow statements.

Most everybody focuses on the income statement, because that's where companies report their profits. But savvy investors know it's the balance sheet that really matters.

Look, for instance, at the cash a company has and compare that to its debt. Did revenues increase, but cash declined in the last quarter? That might be a problem.

For help on looking for fishy things you absolutely must check out the easy-to-read accounting book by the man who put "forensic" accounting on the map, Howard Schilit. A former accounting professor, Schilit advises professional investors on what stocks to avoid. His book on the subject, "Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports," is the gold standard.

One of the many arcane filing names is the Form 8-K. Sounds boring, no? It's not. It's actually where the best stuff is. It's literally the form that companies file to explain extraordinary events.

For example, if a company changes its auditor (often a sign of trouble), it needs to file an 8-K. Companies often will put out press releases on transactions -- say, for example, a sale of stock in a private transaction -- that don't contain many details. Guess where those details are? That's right, in the 8-K. Go there to learn exactly at what price the private buyers are getting in and under what terms. You might be surprised that their deal is better than yours.

One of the most entertaining financial documents is the definitive proxy statement, thrillingly called a Form DEF 14-A. Within this statement that includes proposals to be voted on by shareholders at an annual meeting is the compensation data for the top five executive officers of the company.

You'll find the CEO's pay, his bonus, the number of stock options he was granted, and other fun stuff, like the expense of the security fence around his home.

Perhaps the most important portion of a quarterly or annual report is called "related-party transactions." Search for the term and read it first. It's where the company must disclose any significant business it's doing with people who have relationships with the company.

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Does a board member's employer buy a lot of widgets from the company? Does the CEO sit on the board of a major supplier? Is the vice-president for purchasing getting shares in a vendor? If so, it all should be reported here. It lets you know what motives may be behind management's actions.

These tricks of the trade won't tell you what stocks to buy and sell. But they will let you know a whole lot more about a company you're investigating than you did before.

Adam Lashinsky is a senior writer for Fortune magazine. Send e-mail to Adam at adam_lashinsky@timeinc.com.

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