Mosaic Theory
Categories: Financial Theory
If you thought being a private investigator sounds fun, imagine being a P.I. for a firm: collecting the easy-to-find as well as the hard-to-find information on a company. Private investigators for firms are called security analysts, who, like P.I.s, gather information and sell it to anyone willing to buy it.
One way security analysts do their job is to use the mosaic theory, which consists of gathering and researching multiple types of information on a company: public information, private information, and anything they can get their hands on that might be relevant. All this disparate info creates a “mosaic” (of sorts) of the company.
While many, including the Chartered Financial Analyst Institute, say the mosaic theory is valid, others argue not-so-much, given the sketchy investigatory part (which should be disclosed...like, how security analysts got all of that non-public information).