Mosaic theory
Encyclopedia
Mosaic theory, also referred to more colloquially as the scuttlebutt method by Philip Fisher
in his seminal work Common Stocks and Uncommon Profits, in finance is the method used in security analysis
to gather information about a corporation. Mosaic theory involves collecting information from different sources, public and private, to calculate the value of security. Applying the mosaic theory is as much art as it is science. An analyst gleans as many pieces of information as possible, determines if they tell a story that makes sense, and decides whether to recommend a trade. During the high profile trial of investor Raj Rajaratnam, defense attorneys used mosaic theory to argue against allegations of insider trading.
It is also a legal theory used to uphold the classification of information, holding that a collection of unclassified information might add up into a classified whole. The theory has also been applied to legal reasoning in the context of the Fourth Amendment where the continuous use of GPS surveillance was found to violate the subject's "reasonable expectation of privacy".
Philip Fisher
Philip Fisher may refer to:* Philip Fisher , a.k.a. Thomas Copley, English religious leader* Philip Arthur Fisher , entrepreneur & author* Philip "Fish" Fisher , American musician, member of band Fishbone...
in his seminal work Common Stocks and Uncommon Profits, in finance is the method used in security analysis
Security analysis
Security analysis is the analysis of tradeable financial instruments called securities. These can be classified into debt securities, equities, or some hybrid of the two. More broadly, futures contracts and tradeable credit derivatives are sometimes included...
to gather information about a corporation. Mosaic theory involves collecting information from different sources, public and private, to calculate the value of security. Applying the mosaic theory is as much art as it is science. An analyst gleans as many pieces of information as possible, determines if they tell a story that makes sense, and decides whether to recommend a trade. During the high profile trial of investor Raj Rajaratnam, defense attorneys used mosaic theory to argue against allegations of insider trading.
It is also a legal theory used to uphold the classification of information, holding that a collection of unclassified information might add up into a classified whole. The theory has also been applied to legal reasoning in the context of the Fourth Amendment where the continuous use of GPS surveillance was found to violate the subject's "reasonable expectation of privacy".
See also
- MosaicMosaicMosaic is the art of creating images with an assemblage of small pieces of colored glass, stone, or other materials. It may be a technique of decorative art, an aspect of interior decoration, or of cultural and spiritual significance as in a cathedral...
- Insider tradingInsider tradingInsider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
- Stock valuationStock valuationIn financial markets, stock valuation is the method of calculating theoretical values of companies and their stocks. The main use of these methods is to predict future market prices, or more generally potential market prices, and thus to profit from price movement – stocks that are judged...
- Classified informationClassified informationClassified information is sensitive information to which access is restricted by law or regulation to particular groups of persons. A formal security clearance is required to handle classified documents or access classified data. The clearance process requires a satisfactory background investigation...
- Classified information in the United StatesClassified information in the United StatesThe United States government classification system is currently established under Executive Order 13526, the latest in a long series of executive orders on the topic. Issued by President Barack Obama in 2009, Executive Order 13526 replaced earlier executive orders on the topic and modified the...
- Fourth Amendment to the United States ConstitutionFourth Amendment to the United States ConstitutionThe Fourth Amendment to the United States Constitution is the part of the Bill of Rights which guards against unreasonable searches and seizures, along with requiring any warrant to be judicially sanctioned and supported by probable cause...
- Freedom of Information Act (United States)Freedom of Information Act (United States)The Freedom of Information Act is a federal freedom of information law that allows for the full or partial disclosure of previously unreleased information and documents controlled by the United States government. The Act defines agency records subject to disclosure, outlines mandatory disclosure...