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Companies hide negative news with unrelated press releases alongside SEC filings
- dpflan 3y agoHow can a lay-person investor get as-soon-as-possible access to recently filed form 8-K? What's the gate and delay time?
- rekttrader 3y agoGenerally 24-48 hours depending on when Edgar updates. You can also download the daily filings directly from the sec.... it’s what Bloomberg does.
- pc86 3y agoThis is objectively wrong.
- siftrics 3y agoAll 8-Ks are available to the public on the SEC's EDGAR wesbite. As far as I know, 8-Ks are posted there on the day of filing. That could be wrong and there may be a quicker way to get them.
- rmah 3y agoThere's no delay, they're available immediately to everyone on the SEC EDGAR site (https://www.sec.gov/edgar https://www.sec.gov/edgar).
- breput 3y agoThis is practically real time: https://www.sec.gov/cgi-bin/browse-edgar?company=&CIK=&type=8-K&owner=include&count=40&action=getcurrent https://www.sec.gov/cgi-bin/browse-edgar?company=&CIK=&type=... also available as an RSS/Atom format feed: https://www.sec.gov/cgi-bin/browse-edgar?action=getcurrent&CIK=&type=8-K&company=&dateb=&owner=include&start=0&count=40&output=atom https://www.sec.gov/cgi-bin/browse-edgar?action=getcurrent&C... There is also a paid-for service called PDS (https://www.sec.gov/oit/announcement/public-dissemination-service-system-contact https://www.sec.gov/oit/announcement/public-dissemination-se...) which isn't necessarily any faster but can be more reliable.
- est31 3y agoYour first two links don't push the message though, so you have to keep refreshing the site quickly.
- TylerE 3y agoPush is expensive (in volume) so it’s not really surprising they don’t offer it for free.
- throwaway50603 3y agoIsn't it more expensive to have many people poll frequently?
- gadflyinyoureye 3y agoMight not. Caching plus nginx would allow pretty decent performance. Not sure how expensive misses would be.
- breput 3y agoThe entire public sec.gov site, including filing data, is served from the Akamai CDN. But there is also an AUP (https://www.sec.gov/os/accessing-edgar-data https://www.sec.gov/os/accessing-edgar-data) which limits the number of requests per second, which in reality is quite a bit less than is documented.
- TylerE 3y agoVs push where someone sets up to receive it and then… never turns it off?
- breput 3y agoIf that is a problem and it is worth it to you, you pay for PDS - https://www.sec.gov/info/edgar/pds-new-subscriber-040819.pdf https://www.sec.gov/info/edgar/pds-new-subscriber-040819.pdf
- scrum-treats 3y ago
- xwdv 3y agoBefore you think about making something that quickly reads 8-K filings and acts upon it: don’t bother. A bunch of entities are already doing this way faster than you ever can through various methods and by the time you get the data the opportunity to act is gone.
- 317070 3y agoI believe the current SOTA is to submit trades in the order of 10ms after the document is available online. In that time they downloaded the file, ran sentiment analysis on it and ran the numbers, decided which way to go and sent the trades to the market. It's worth every penny to be first, but unless you have a lot of pennies, you won't be first.
- neilv 3y agoDespite being a Boglehead (total-market index investor), who thinks that's the best tablescraps I can get, when I can't be in the club of the people who're making the real money from the systems... I have idly wondered whether there's an viable opportunity to exploit retail investors who're being manipulated/misled (by, e.g., MSM financial 'news', stock-picker personalities, bloggers, WSB, etc.). Then I realize I was considering actively profiting off the misery of other retail investors, and decide to just stick to my index funds.
- andylynch 3y agoThe Inverse Cramer ETF (SJIM) would be right up your alley.
- n2d4 3y ago> I have idly wondered whether there's an viable opportunity to exploit retail investors who're being manipulated/misled (by, e.g., MSM financial 'news', stock-picker personalities, bloggers, WSB, etc.). Generally, this idea doesn't work because "manipulated"/misled retail investors will still be right 50% of the time. Being bad at trading gets you zero EV, not negative. But if you look closely, those retail investors pay fees and spread, and if you find a way to collect those, you have a strategy. Usually, spread protects the security seller against adverse selection and market movements. But if you sell to someone who certainly doesn't know more than you do, you can just collect the spread without taking any of the risks. This is why payment-for-order-flow is viable, and why retail traders get lower fees on platforms like Robinhood than professional traders on platforms like IBKR Pro. Whatever you do, you're probably not going to find a better strategy than the multi-billion dollar hedge funds trying to do the exact same thing but with a team of 200, and you'd just end up as one of those "retail investors" you'd try to exploit. Boglehead is the smart choice.
- quickthrowman 3y agoSEC’s EDGAR database has the filings available to everyone the moment they’re released. It will take you 5-10x longer to press F5 than it takes a bank/hedge fund to have a bot ingest the news and trade off of the new information. Even if you could ingest the information instantly, your orders will be slower than the people who are co-located within the same data center as the exchange, or the folks who set up private microwave relay networks between Chicago and NYC.
- anigbrowl 3y agoThe very fact that people go to such lengths to rig trading systems in their favor suggests they're not worth retaining in their current form.
- hef19898 3y agoLike Robinhood and all those other "free" trading plattforms?
- quickthrowman 3y agoYou could make the argument it benefits anyone who sells equities, right now SPY has a penny wide bid/ask spread. One basis point is an extremely tight spread on an instrument that costs $413/unit. Pre-2001 the minimum tick size was $0.0625, and pre-1997 it was $0.125, I’ll take $0.01 spreads any day.
- hbcondo714 3y agoThere are over 30 different types[1] of 8Ks and receiving notifications on all of them will inundate your inbox. It's a shameless plug but my freemium 'lay-person investor' site[2] will allow you to filter and select which 8Ks to view and receive notifications on. For example, you can receive an email every time a company files an event about a Bankruptcy / Receivership: https://last10k.com/stock-screeners/bankruptcy-receivership https://last10k.com/stock-screeners/bankruptcy-receivership [1] https://www.sec.gov/answers/form8k.htm https://www.sec.gov/answers/form8k.htm [2] https://last10k.com https://last10k.com
- oxfordmale 3y agoOpenAI is going to make a difference here. These filings are often challenging to read for a lay man. However, ChatGPT should be able to have a decent go at mood analysis. Until companies start rewriting their articles to be OpenAI "proof"
- alfalfasprout 3y agothere are already several companies that offer machine readable digests. Not sure you want an LLM to do this b/c the risk of it hallucinating is terrifying.
- brookst 3y agoUsing hallucinations as evidence that LLM’s can’t be useful for summarizing today is like saying airplanes can’t be used for intercontinental travel in 1980.
- hef19898 3y agoActually, those SEC filings are not that jard to read. I had a collegue who used ChatGPT to summarize those for him. Since even SEC filings contain letters to shareholders, all they got was a ChatGPT version of that, missing all the relevant and important stuff about risks and such. Also, what is not written in those filings is at at least as important as what is written, ChatGPT utterly fails here.
- deleted 3y ago[deleted]
- tlrobinson 3y agoIf I had a little more time I’d make a Twitter bot that used an LLM to extract unrelated / negative news from SEC filings and post it.
- nico 3y agoWill at any point we be able to build a system that won’t be gamed? ie. A system whose incentives are perfectly aligned with its operators and users incentives?
- boringg 3y agoNever. We are humans - humans are by our very nature dynamic.
- nico 3y agoYou mean we have to always oppose someone else’s incentives? Or we always have to see someone else’s incentives as an opposition to ours? What does dynamic nature imply? Can’t a system be dynamic?
- advisedwang 3y agoIn system/process design, you generally need feedback in a system to operate optimally. Rather than try and create a system that can be set up and left alone - which will eventually get gamed or otherwise become unfit over time - we should aim to have feedback to continuously adjust and improve our systems. For the highest level functions of our society, this feedback is humans and politics. We need a politics that allows issues in the financial system (and all other societal systems) to be assessed and changed over time, responsive to the needs of the people.
- gsatic 3y ago
- actionfromafar 3y agoAnd Boris Johnson makes model buses out of old cardboard and paint. Right...
- bagels 3y agoWas that part of the study? Seems like an unrelated piece of trivial.
- AndrewDucker 3y agohttps://www.scotsman.com/news/opinion/columnists/sinister-theory-about-boris-johnsons-model-bus-story-john-mclellan-1414345 https://www.scotsman.com/news/opinion/columnists/sinister-th...
- deleted 3y ago[deleted]
- kikokikokiko 3y agoCompanies astroturffing bad news is the rule on every aspect of their business, not just sec fillings. An example: down here in Brazil, and pretty much in all of Latin America, CocaCola changed their formula on the classic Coke, reducing the ammount of sugar and mixing it with artificial sweeteners. They started rolling out this change mid 2021, and for someone that absolutely hates the after taste of artificial sweeteners like me, it was an obvious change. I haven't had a Coke since, to me it's dead. But anyways, if you try to find any mention about the change in the formulation of CocaCola on the brazilian version of Google, you only find articles about the new "Zero Sugar Coke" formula, and no news AT ALL about the change to the original Coke. Even in Facebook and Twitter, any search for "coke changed formula" always retrieves posts about the new formula of Coke Zero on the first results. These companies have gaslighting departments, that's part of being a corporation in 2023.
- gooseyman 3y agoI think you mean nerfing in the first line. But I learned a new one I’m going be using all the time now - thank you https://en.m.wikipedia.org/wiki/Astroturfing https://en.m.wikipedia.org/wiki/Astroturfing
- gnicholas 3y agoThis reminds me of Footnoted*, [1] a site that surfaces useful info that companies hide in footnotes, bury on a Friday afternoon dump, etc. I think there's a weekly newsletter that comes out after the Friday news dump has been picked through. EDIT: found the newsletter [2] 1: https://www.footnoted.com/ https://www.footnoted.com/ 2: http://fnd.footnoted.com http://fnd.footnoted.com
- rendaw 3y agoAll the articles seem paywalled or stubs pointing to articles on other sources. Do you have any readable examples?
- gnicholas 3y agoThe first link is the regular site, which is what I’ve looked at before. For me, much of the value is just in the headline, which flags the issue so I can investigate further if it sounds interesting.
- scrollaway 3y agoThis seems like a very good use case for GPT models: Surfacing buried information.
- eshack94 3y agoI have used it for that very use case while analyzing the terms and conditions of some documents before signing. I still read them all myself as well, because I do not trust the current state of GPT to not miss anything important. But it helped me get a basic understanding and overview before I started my own analysis.
- hef19898 3y agoOr to write the press releases published along side SEC filings. Notbsure why that actually helps, the SEC filongs are public... Justvanother case of the public and media not giving a damn about primary sources anymore. Edit: From the article: >> “We find it surprising this behavior is so effective,” Watkins said. “Investors should not assume press releases cover all events happening at a company at a given time.” Apparently I am not the only one who is puzzled by thale fact the press releases actually seem to work...
- javajosh 3y agoFile this under one of those rulesets that needs updating since "behavioral norms" is no longer really a thing in the world.
- vitorsr 3y agoWaiting for the Matt Levine column ‘Are Unrelated Press Releases Securities Fraud?’
- brookst 3y agoIn which he concludes that, yes, they are. But so is not issuing unrelated press releases when bad news strikes.
- gniv 3y ago> ‘Are Unrelated Press Releases Securities Fraud?’ You jest, but they actually could be. One scenario would be for insiders to trade on the information after they released it publicly. So the temporary obfuscation might give them time to trade before the news had time to affect the stock.
- langsoul-com 3y agoAustralian politicians do the same. Important or bad news gets released before a holiday, when people are not paying attention.
- c0m 3y agoAll politicians and companies do this type of thing. Here's [1] a particularly egregious example from 9/11, where a UK government advisor sent out a memo at advising "It's now a very good day to get out anything we want to bury". Judging from the tone, the writer was elated. She sent the email shortly after the second plane hit. https://www.theguardian.com/politics/2001/oct/09/uk.past https://www.theguardian.com/politics/2001/oct/09/uk.past
- wly_cdgr 3y agoWow, really?
- p0w3n3d 3y agoIsn't this called damage control and is the most widely used pattern in politics too?
- defrost 3y agoThe Commonwealth (Australia | UK at least) terminology of recent years is to call this Throwing a dead cat on the table a technique perfected by some Australian|New Zealand marketing consultants that turned to politics and advised both the AU and UK Governments. Boris Johnson (former UK PM) perfected the technique .. no matter how bad an actual real news worthy political event might be .. no paper pays attention if you announce something totally bonkers and ridiculous at the same time. Good Grief! Did you see that!! He threw a dead cat on the table!!!
- denton-scratch 3y agoThat was my reaction. "Wow - companies engage in public relations? I'd never have guessed."