TrimTabs Investment Research
|Founded||Santa Rosa, CA (1990)|
|Founder(s)||Charles Biderman, CEO|
|Headquarters||1505 Bridgeway, Ste 121
Sausalito, CA, United States
|Key people||Charles Biderman, Founder & CEO|
|Products||Investment Research, Asset Management|
|Subsidiaries||TrimTabs Asset Management, LLC|
TrimTabs Investment Research, Inc. is an independent investment research firm based in Sausalito, California.
TrimTabs is an independent research service that publishes detailed daily coverage of global stock market liquidity--including mutual fund and exchange-traded fund flows—as well as withheld and non-withheld tax collections. Founded by Charles Biderman in 1990, TrimTabs provides institutional investors with trading strategies and investment insights. About twenty-five percent of the top fifty hedge funds in the world use its research for market timing.
TrimTabs’ perspective relies on the insight that stock prices are a function of supply and demand and have nothing to do with value. To track the supply of stock on both the U.S. stock market and on non-U.S. stock markets, TrimTabs uses proprietary techniques to collect data on cash takeovers, stock buybacks, new offerings, and insider trading. To track the demand for stock, TrimTabs measures the daily monetary flows into and out of mutual funds and exchange-traded funds and the monthly monetary flows into and out of hedge funds.
Charles Biderman founded TrimTabs in Santa Rosa, California in 1990. The company originally focused on providing stock trading ideas to hedge funds. Its first recommendation was the short sale of Midlantic National Bank, which traded in the high $20s in January 1990. Ultimately, Midlantic was taken over at a price of under $10 to save the bank from bankruptcy.
Biderman eventually noticed that no one was tracking money flows into and out of the U.S. stock market on a regular basis. He began searching for real-time data on money flows of all sorts, including corporate buying and selling, mutual fund flows, and changes in margin debt.
Corporate America became a heavy net buyer of stock in late 1994, and inflows into stock mutual funds from individuals began to accelerate in 1995. By that time, Biderman realized that TrimTabs’ specialty of short selling was not working well because of the sheer volume of cash flooding into the U.S. stock market from corporate America and individual investors. In August 1995, he began to analyze U.S. stock market liquidity in what would later become TrimTabs Weekly Liquidity Review. TrimTabs' investment approach is described in detail in TrimTabs Investing: Using Liquidity Theory to Beat the Stock Market (John Wiley & Sons, 2005).
TrimTabs has broadened its offerings in recent years. In 2002, it launched TrimTabs Weekly Macro Analysis, which uses real-time indicators such as income tax collections and online job postings to assess the health of the U.S. economy. In 2005, TrimTabs Asset Management was founded. This subsidiary manages money using an absolute return strategy that applies TrimTabs’ investment insights. In 2006, TrimTabs unveiled TrimTabs Sector Liquidity, which assesses the liquidity of U.S. stock market sectors and sub-sectors. It also launched TrimTabs Global Liquidity Review, which currently tracks liquidity on the London Stock Exchange, the Euronext Paris, the Hong Kong Stock Exchange, and the Toronto Stock Exchange.
On February 11, 2008, Goldman Sachs announced that it had made a minority investment in TrimTabs through its Hudson Street Services business.
TrimTabs takes its name from the trim tab that lies deep within an ocean-going ship. The trim tab is a minuscule rudder that runs the length of the main rudder. To change the ship’s direction, one must first turn the trim tab, and then the main rudder follows. TrimTabs contends that just as the movement of a trim tab determines the direction of a ship, changes in the trim tabs of liquidity theory are the key to understanding the stock market’s direction.
- December 27, 1999. "Historically bull markets end for one reason and one reason only: the supply of shares exceeds the demand. Liquidity analysis is the only way to know to determine when a bull market will end. Liquidity is bullish right now. But that will change starting with the new year. . . .Therefore, starting in February the free float could grow each month by $60 billion - $23 billion, or $37 billion. Where will the more than $37 billion of new cash monthly come from to stop a market collapse?" (Liquidity TrimTabs, December 27, 2002)
- December 26, 2002. “We are as bullish this year end as we were bearish at the end of 2001. This is the first time since the end of 1999 that all three of our liquidity indicators at year-end were fully aligned with anecdotal evidence. (At the end of 1999) we were bearish, now we are bullish. L1, the net change in the trading float of shares, is bullish as corporate buying outweighs corporate selling. L2, flows in and out of U.S. equity funds, is bullish due to the extreme bearishness of fund investors. L3, margin debt, either shrank more than the market when stocks dropped or rose less than the market when stocks rose since July, 2002.” (Barron's Magazine, January 6, 2003)
- May 14, 2012. "For disclosure reasons I plan to buy Facebook either the day of or the day after the IPO and keep it for the long term. In my opinion, Facebook has greater long-term growth potential than Google(GOOG), LinkedIn(LNKD), or any other social media play. Yes, Facebook has yet to figure out how to monetize iPhone(AAPL) usage, but they will." (Biderman's Daily Edge, May 14, 2012)
TrimTabs teamed up AdvisorShares to launch the AdvisorShares TrimTabs Float Shrink ETF (TTFS) on October 4, 2011. "TTFS is sub-advised by TrimTabs Asset Management ("Portfolio Manager"), a subsidiary of TrimTabs Investment Research (TrimTabs). The Fund seeks to achieve this objective by investing in stocks with liquidity and fundamental characteristics that are historically associated with superior long-term performance. Stock selection for TTFS is based on extensive historical research from TrimTabs, the leading independent institutional research firm focusing on stock prices as a function of supply and demand rather than value." Charles Biderman is the CEO of TrimTabs and a Portfolio Manager for the ETF along with Minyi Chen. AdvisorShares has a controversial history and has been involved in litigation with Esposito Securities, Fund.com and CEO Noah Hamman's former employer Arrow Funds. 
- "The Team". TrimTabs Team. TrimTabs Investment Research. 2007. Retrieved 2007-11-14.
- "AdvisorShares TTFS page".
- "AdvisorShares TTFS page".
- "Request for Hearing on Application of AdvisorSharesInvestments,LLC and AdvisorSharesTrust,Investment Company Act Release No. 28568; 812-13488".
- "IN RE: ARROW INVESTMENT ADVISORS, LLC,".
- "Esposito Securities LLC v. AdvisorShares Investments LLC". RECAP.
- "THE COMMERCIAL DIVISION LAW REPORT". Commercial Division of the Supreme Court of the State of New York.