TrimTabs CEO: Forget Earnings, Watch Float Shrinkage Instead

The AdvisorShares TrimTabs Float Shrink ETF has outperformed the S&P 500 since its October 2011 because of simple supply and demand, said the fund's portfolio manager Charles Biderman.
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The AdvisorShares TrimTabs Float Shrink ETF has outperformed the S&P 500 since its October 2011 because of simple supply and demand, said the fund's portfolio manager Charles Biderman. Biderman said earnings are often manipulated, yet companies cannot overstate or understate the number of shares they have in the market. Biderman said he invests in companies that grow cash flow to buy back shares, thereby shrinking the outstanding float. He said large cap tech players like Apple and Oracle are big float shrinkers, as wellas oil refiners which have been buying back a lot of shares of late.