Frequently Asked Questions

Free Trial
-What will happen when I sign up for a free one-month trial?
-How do I receive TrimTabs research after I have signed for a free trial?
-How do I receive TrimTabs research?
-Will I be obliged to pay anything if I sign up for a free one-month trial?

Company
-Who is Charles Biderman?
-How long has TrimTabs operated?
-Where does the name of TrimTabs come from?
-Is TrimTabs mentioned in the media?
-Is there any charge for visiting TrimTabs.com?

Research
-What is market liquidity analysis?
-How does TrimTabs measure equity market liquidity?
-What is L1?
-How does TrimTabs estimate insider sellings?
-How has the TrimTabs model portfolio performed?
-Who subscribes to TrimTabs research?
-How do subscribers make money using TrimTabs research?
-When does TrimTabs publish its research?
-Does TrimTabs offer research for individual investors?

Terminology
-What do your terms bullish, leveraged bullish, cautiously bearish etc. mean?
-What is the difference between a convertible new offering and new offerings?
-What is a green shoe? And white shoe?


-What will happen when I sign up for a free one-month trial?

You will receive an email confirmation thanking you for registering for a free one-month trial. It may take up to seven days to process your request in our database. Then you will begin to receive TrimTabs research. The research will be transmitted either as a text email message or as an Adobe PDF file attached to an email message.


-How do I receive TrimTabs research after I have signed for a free trial?

TrimTabs research is distributed via email only directly to your inbox. The research is sent as text within the body of an email, as a Adobe Acrobat PDF or a combination of both.


-How do I receive TrimTabs research? Can I log in to TrimTabs.com to download it?

TrimTabs research is sent to you by email. It is currently not available at TrimTabs.com.


-Will I be obliged to pay anything if I sign up for a free one-month trial?

There is absolutely no obligation if you receive a free one-month trial. Your trial will automatically expire after thirty days if we do not hear anything from you.


-Who is Charles Biderman?

"Price is a function of liquidity and has nothing to do with value."

Charles Biderman is President and founder of TrimTabs Investment Research. Born in New York City, he earned a BA from Brooklyn College and an MBA from Harvard Business School. He began his career as Alan Abelson's assistant at Barron's from 1971 to 1973. There he predicted the collapse of real estate investment trusts (REITs). After Barron's, he worked in the Wall Street short selling community and recommended shorting REITs on their way to perdition.

After much of the REIT industry went bust, Biderman became a successful real estate entrepreneur, putting together various deals in Tennessee and New Jersey. His first deals in the mid-1970's were the purchase of 1,000 apartments, six shopping centers and two office buildings from REITs and banks. Although he predicted the real estate market would collapse in 1988, he did not anticipate that no liquidity would be available for development. This miscalculation forced him into personal bankruptcy and taught him the distinction between value and price: value is the intrinsic worth of an asset, while price is the amount of money that a buyer agrees to pay a seller for an asset. This simple distinction was the foundation not only for Biderman's next move but for a new investment paradigm: liquidity theory.

In 1990, Biderman founded Market TrimTabs in Santa Rosa, California. He named the firm after the image of a trim tab first used by R. Buckminster Fuller to describe how change occurs. A trim tab is the small rudder on the rudder of a capital ship. Although the trim tab's mass is a tiny fraction of the ship's mass, movement of the trim tab determines the ship's course.

Market TrimTabs originally specialized in short selling, but Biderman began tracking mutual funds flow twice each week in 1994. He realized that short selling was not working well because of the amount of cash flooding into the U.S. stock market, and he began tracking other factors that determine stock market liquidity in 1995. As the firm developed into the only independent research service that publishes detailed daily coverage of U.S. stock market liquidity, including daily mutual funds flow and withheld income and employment tax collections, it became known as TrimTabs Investment Research. The premise of TrimTabs' approach is that stock prices are a function of liquidity rather than fundamental value.


-How long has TrimTabs operated?

In 1990, Charles Biderman founded Market TrimTabs, which specialized in short ideas. TrimTabs began to track mutual funds flow in 1994, and Biderman launched TrimTabs Weekly Liquidity in January 1995.


-Where does the name of TrimTabs come from?

Buckminster Fuller once said, to maximize change find the trim tabs. A trim tab is the rudder on the rudder of a capital ship. The first visible sign that a big ship is about to turn is the trim tab moves. A trim tab is also the name of the aileron control on most airplanes.


-Is TrimTabs mentioned in the media?

TrimTabs receives extensive media coverage. Charles Biderman is interviewed regularly on CNBC, Bloomberg, and CNN, and he is quoted regularly in The Wall Street Journal, Barron's, and USA Today. To read media coverage of TrimTabs, please click here or search for "TrimTabs" or "Charles Biderman" at Google News.


-Is there any charge for visiting TrimTabs.com?

There is no charge for visiting TrimTabs.com.

-What is market liquidity analysis?

Equity market liquidity analysis holds that public companies are the “house” in the stock market. When they are net buyers of shares, the stock market eventually rises. When they are net sellers of shares, the stock market eventually drops. By contrast, individual investors follow rather than lead the stock market.

When individuals join public companies in being net buyers, it is a liquidity bull market because more money is chasing fewer shares. When individuals follow hedge funds and pension funds in buying while public companies are net sellers, a sell-off is likely to occur soon. When individuals join public companies in being net sellers, it is a liquidity bear market because less money is chasing more shares. When public companies are net buyers while individuals are heavy net sellers, the market is making a bottom. For further information on liquidity theory, click here.

-How does TrimTabs measure equity market liquidity?

TrimTabs provides daily coverage of corporate actions, mutual fund and exchange-traded fund flows, and real-time macro indicators, which collectively drive changes in equity market liquidity. Our equity market liquidity analysis predicts the near term direction of the stock market. Our clients look to us as the best source for liquidity-based investment insights.

-What is L1?

L1 is our estimate of the net change in the trading float of shares. It is our most important measure of equity market liquidity, and we calculate it daily. L1 is a proxy for the actual net change in the trading float of shares, which we can only know months in arrears.

Here is how we calculate L1:


On the sell side, Dealogic reports daily on IPOs, secondary offerings, and convertible offerings. We count 10% of the dollar amounts of non-U.S. deals and add 15% to the dollar amounts of U.S. deals to account for over-allotments. We estimate insider selling by doubling the dollar amounts of Form 144 proposed sales reported by Thomson Financial (see the section below for further details).

On the buy side, we count two-thirds of the dollar amounts of cash takeovers of U.S. public companies when they are announced and one-third of the dollar amounts when they are completed. We also count the entire dollar amounts of share repurchases by U.S. public companies when they are announced. We can only know the dollar amounts of actual share repurchases months in arrears.

In general, when L1 is negative (the supply of shares is decreasing), we are bullish. When L1 is positive (the supply of shares is increasing), we are bearish.


-How does TrimTabs estimate insider selling?

The Securities and Exchange Commission (SEC) requires major insiders—officers, directors, and major shareholders—to file Form 4 within 48 hours of when they buy shares, sell shares, or exercise stock options. The SEC also requires other major insiders—including some who are not required to file Form 4—to file Form 144 to report their intentions to sell restricted shares that have never been included in a public offering. Thomson Financial tracks Form 144 filings on a daily basis.

Most insiders are not required to file Form 4 or Form 144 when they sell shares because their holdings were included in a blanket share registration as part of an options program or a public offering. Since there is no way to track insider selling by insiders who are smaller holders, we double Form 144 filings to estimate insider selling by all insiders.


-How has the TrimTabs model portfolio performed?

We began our model portfolio on September 29, 2000. The table below compares its performance with the performance of the S&P 500 and the NASDAQ 100 (all percentages include dividends).

Year	Model Portfolio	S&P 500	NASDAQ 100
2000 (from Sept. 29)	-10.7%	-8.4%	-34.2%
2001	32.0%	-12.1%	-33.4%
2002	63.4%	-21.60%	-37.4%
2003	0.1%	28.2%	49.6%
2004	19.9%	10.7%	10.5%
2005	+3.9%	4.8%	1.6%
2006 (through June 16)	-8.4%	1.0%	-5.0%
Since Inception (Sept. 29th, 2000)	141.5%%	-5.2%	-56.2%

-Who subscribes to TrimTabs research?

TrimTabs subscribers include money managers, mutual funds and hedge funds on the buy-side and market strategists on the sell-side.


-How do subscribers make money using TrimTabs research?

TrimTabs research is a macro timing tool that predicts the direction of the overall stock market based on changes in equity market liquidity. To outperform, anyone who manages a large pool of assets needs to be more than a great stock picker. He or she must be able to know where the overall stock market is heading. Portfolio managers who follow conventional fundamental analysis, which holds that stock prices change based on changes in expected future earnings, are doomed to underperform portfolio managers who follow equity market liquidity.


-When does TrimTabs publish its research?

The table below shows our publication schedule. We distribute our publications before the deadlines if they are finished early.

Publication	Time (Eastern Standard Time)
TrimTabs Daily Liquidity	Monday-Friday By 4pm
TrimTabs Weekly Liquidity	Monday By 4am
Overnight Liquidity Update	Monday-Thursday By 1am
TrimTabs Personal Income and Consumer Cash Flow Analysis	Tuesday By 6pm
TrimTabs Sector Liquidity Report	Every other Friday By 4pm
TrimTabs Exchange Traded Funds	Monday-Friday By 4pm

-Does TrimTabs offer research for individual investors?

No, TrimTabs research is designed for institutional investors.


-What is the difference between a convertible new offering and new offerings?

A convertible new offering is either a bond or preferred stock that is convertible into common shares of the issuer at a premium to the price of the common stock when the convertible was sold. Most convertibles pay interest, usually less than the coupon on non-convertible bonds and preferreds.

New offerings are a company or insiders selling new shares via an underwriter whether straight equity or as a convertible. Sales by insiders of never before sold shares, not offered to the public by an underwriter, are counted under insider selling.

We equate convertibles as the same as regular new offerings dollar for dollar. Several followers of liquidity theory discount convertible new offerings by the premium over the common. We don't. The reason we don't is that most of the money going to buy convertible bonds is equity money.

-What do your terms bullish, leveraged bullish, cautiously bearish etc. mean?

Cautiously bullish or cautiously bearish means we are buying or selling stock index futures whose principal amount is equal to 50% the dollar value of our model portfolio.

Bullish or bearish means we are buying or selling stock futures equal to 100% the dollar value of our model portfolio.

Leveraged bullish or leveraged bearish means we are buying or selling stock futures equal to 200% the dollar value of our model portfolio.

Call	Position
Leveraged Bullish	200% Long
Bullish	100% Long
Cautiously Bullish or Cautiously Bearish	50% Long/50% Short
Bearish	100% Short
Leveraged Bearish	200% Short

-What is a green shoe? And white shoe?

A "green shoe" is the underwriter's option to buy, usually 15%, additional shares at the offering price from the company selling new shares. During the 1920's a new share offering by The Green Shoe Company was the first time underwriters received an option to buy more shares at the offering price.

"White shoe" is the Wall Street phrase to describe corporate finance types. At the turn of the century the corporate finance types were the Street elite and wore white shoes since they never did anything that would get them dirty.