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, Mr. Biderman
became a successful real
estate entrepreneur, putting together various deals
in Tennessee and New Jersey.
His first deals in the mid-1970s were the purchases
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 Mr. Biderman’s
next move but for a new investment paradigm: liquidity theory. In 1990,
Mr. 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 Mr. Biderman began
tracking
mutual fund flows twice each week in 1994. He realized that short selling
was
not working well because of the sheer volume of cash flooding into the U.S.
stock
market. 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, 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. Mr. Biderman is interviewed regularly on CNBC and Bloomberg and is
quoted
frequently in the financial media, including Barron’s, the Wall
Street Journal,
Forbes, and Investor’s Business Daily. He is the author
of TrimTabs Investing:
Using Liquidity Theory to Beat the Stock Market (John
Wiley & Sons, 2005).
He holds a BA from Brooklyn College and an MBA from
Harvard Business School. | 
