Wednesday, February 28, 2007

My first post

“Regulation FD (Fair Disclosure) is a new issuer disclosure rule that addresses selective disclosure. The regulation provides that when an issuer, or person acting on its behalf, discloses material nonpublic information to certain enumerated persons (in general, securities market professionals and holders of the issuer's securities who may well trade on the basis of the information), it must make public disclosure of that information. The timing of the required public disclosure depends on whether the selective disclosure was intentional or non-intentional; for an intentional selective disclosure, the issuer must make public disclosure simultaneously; for a non-intentional disclosure, the issuer must make public disclosure promptly. Under the regulation, the required public disclosure may be made by filing or furnishing a Form 8-K, or by another method or combination of methods that is reasonably designed to effect broad, non-exclusionary distribution of the information to the public.” – SEC

http://www.sec.gov/rules/final/33-7881.htm

In essence, Regulation FD leveled the playing field for individual investors by requiring issuers to provide the little guy with the same information made available to the investment pros. While leveling the playing field, the increased availability of information afforded by Regulation FD would seemingly result in increased market efficiencies, which in turn would make it more difficult for investors to achieve above market returns. Despite Regulation FD, there remain inefficiencies in the market. Tuesday’s 400 point decline in the Dow and nearly 100 point decline in the NASDAQ is a perfect case in point.

In my opinion, the greatest inefficiencies lie in small cap stocks. The purpose of my blog is to gather, analyze, and present information on various small cap stocks to help readers exploit these inefficiencies. I will apply the basics principles of fundamental analysis to identify potential small cap stocks that I believe offer the potential for market beating returns over the long-term. I will focus primarily on profitable and fast growing companies trading on one of the major exchanges. I will update information on the stocks I discuss based on SEC filings, news reports, analyst reports, insider transactions, industry developments, conference calls, and investor conferences. Whenever possible, I will provide links to source documents.

I expect anyone reading my blog will use the information in my blog as a supplement to their normal due diligence. Please do not make decisions to buy or sell stocks based solely on what is posted on my blog.

Regards,
Tuff

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