Mosaic Theory

AAA

DEFINITION of 'Mosaic Theory'

A method of analysis used by security analysts to gather information about a corporation. Mosaic theory involves collecting public, non-public and non-material information about a company in order to determine the underlying value of the company's securities and to enable the analyst to make recommendations to clients based on that information.

BREAKING DOWN 'Mosaic Theory'

Some see this style of analysis as a misuse of insider information, but the CFA Institute (formerly known as AIMR) has recognized mosaic theory as a valid method of analysis. However, analysts using this method should disclose the details of the information and methodology they used to arrive at their recommendation.

RELATED TERMS
  1. Chartered Financial Analyst - CFA

    A professional designation given by the CFA Institute (formerly ...
  2. Security Analyst

    A financial professional who studies various industries and companies, ...
  3. Material Insider Information

    Material information, about certain aspects of a company, that ...
  4. Analyst

    A financial professional who has expertise in evaluating investments ...
  5. Insider Information

    A non-public fact regarding the plans or condition of a publicly ...
  6. Money Manager

    A business or bank responsible for managing the securities portfolio ...
Related Articles
  1. Insurance

    What You Need To Know About Financial Analysts

    Thinking about relying on analyst recommendations for your next trade? We'll show you what to watch out for.
  2. Economics

    Defining Illegal Insider Trading

    The better you understand why insider trading can be criminal, the better you'll understand how the market works.
  3. Markets

    Introduction To Fundamental Analysis

    Learn this easy-to-understand technique of analyzing a company's financial statements and reports.
  4. Economics

    Explaining Kurtosis

    Kurtosis describes the distribution of data around an average.
  5. Term

    What is Financial Technology?

    Financial technology, or fintech, is a financial services sector that emerged in the 21st century.
  6. Fundamental Analysis

    How Does Sampling Work?

    Sampling is a term used in statistics that describes methods of selecting a pre-defined representative number of data from a larger data population.
  7. Personal Finance

    Do Financial Analysts Need Financial Advisors?

    Financial analysts are very knowledgable about investments, but that doesn't mean they couldn't use advice on how to manage their own finances.
  8. Investing News

    Are These 2015's 10 Best Generic Pharma Stocks?

    These 10 generic generic pharma stocks present a lot of upside potential for the second half of 2015. Here's why.
  9. Fundamental Analysis

    Understanding Periodic Vs. Perpetual Inventory

    An overview of the two primary inventory accounting systems.
  10. Economics

    Explaining Financial Analysis

    Financial analysis is a general term that refers to using financial data to make business and investment decisions.
RELATED FAQS
  1. How stressful is the typical corporate finance job?

    In the financial industry, corporate finance jobs are often contrasted with investment banking jobs. The traditional view ... Read Full Answer >>
  2. What are the benefits of hiring a Chartered Financial Analyst (CFA) to be my financial ...

    A Chartered Financial Analyst (CFA) has successfully passed rigorous coursework in the fields of economics, financial analysis, ... Read Full Answer >>
  3. How do I become a Chartered Financial Analyst (CFA)?

    According to the CFA Institute, a person who holds a CFA charter is not a chartered financial analyst. The CFA Institute ... Read Full Answer >>
  4. Who sets the guidelines for accounting principles?

    While the generally accepted accounting principles (GAAP) are not a strict requirement of all U.S. corporations, the guidelines ... Read Full Answer >>
  5. Other than accounting, what does a corporate finance job involve?

    While a corporate finance job almost always involves accounting in some capacity, there are many additional job duties and ... Read Full Answer >>
  6. How do I perform a financial analysis using Excel?

    Investors can use Excel to run technical calculations or produce fundamental accounting ratios. Corporations use Excel to ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
  2. Tiger Cub Economies

    The four Southeast Asian economies of Indonesia, Malaysia, the Philippines and Thailand. Tiger cub economy indicates that ...
  3. Gorilla

    A company that dominates an industry without having a complete monopoly. A gorilla firm has large control of the pricing ...
  4. Elephants

    Slang for large institutions that have the funds to make high volumes trades. Due to the large volumes of stock that elephants ...
  5. Widow's Exemption

    In general terms, a widow's exemption refers to the amount that can be deducted from taxable income by a widow, thereby reducing ...
  6. Wedding Warrant

    A warrant that can only be exercised if the host asset, typically a bond or preferred stock, is surrendered. Until the call ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!