Could the Liquidity Theory Work for You?
The liquidity theory is propounded in great detail, in comprehensible language, in the book “TrimTabs Investing: Using Liquidity Theory to Beat the Stock Market”, co-authored by Charles Biderman and David Santschi. TrimTabs was founded by Charles Biderman in 1990, and in 1995 he shifted the focus of the company to equity market liquidity involving surveys of U.S. mutual funds. TrimTabs is currently the only company tracking daily flows in mutual funds. In subsequent years the company underwent a number of changes including the development of valuable investment tools and information.
TrimTabs launched their Weekly Macro Analysis in late 2002, which assesses the strength of the U.S. economy through the use of real-time indicators such as online job postings and income tax collections. March 2006 saw the launch of the Sector Liquidity Review, which utilizes TrimTabs’ innovative liquidity approach to establish which market sectors are top performers. Testifying to its success, TrimTabs’ market calls-based portfolio showed a 27 percent return in the first year, outperforming the S&P500 Index by 21.5 percent. The company has since added coverage of the London Stock Exchange, Euronext Paris, Hong Kong Stock Exchange and Toronto Stock Exchange. The liquidity theory and analysis is proving to be an influential tool with regard to market timing.
TrimTab clients have reportedly been using the liquidity theory, with gratifying success, over the past decade. The authors are confident that whether you are managing billions of dollars or are an individual investor taking care of your own investment portfolio, “TrimTabs Investing: Using Liquidity Theory to Beat the Stock Market” will guide you in your efforts to beat the major stock market averages with minimal risk.