Ethiopia, where my wife and daughter and I travelled recently, is a very curious corner of the world indeed. Twice the size of France and with about the same population, it sits just above the equator in east Africa. Directly across the Red Sea lies Yemen and then, to the north, Saudi Arabia.

They had not reviewed the testing manual, so they made a little tiny trifling booboo or two.

When large matters go awry, they often follow standard patterns—groupthink, hubris-nemesis, the Ponzi scheme, speculative manias, the “distance lends enchantment” mirage, and other raptures—alone or in combination.

To invest sensibly you need to understand what the company is trying to tell you in its financial statement. Though the elements are fairly simple, I observe that many of my clients have trouble reading one. So here is a simple guide to help get started.