September 9, 2020
I would like to be clear that I am opposed to this suggested regulatory change.
The 13f filings rule as it stands is an incredible tool to the little investor like me, who uses the information to subsidize the important need for stock research, by being able to leverage what professional portfolios are doing and what companies they are doing it with in a timely manner. I do not have, nor can I afford a team of analysts to help create or confirm my research in a company. But being able to follow along with professional portfolio managers and see their decisions on what stocks they are buying and selling based on their teams of analysts' research, is an immense boost of confidence to a small investor to see that several professionals bought a stock that her or she is interested in.
I hope the SEC considers the importance of this information and that it remain publicly available for the missions of small investors who are becoming more financially literate because of the availability of managers like Guy Spier and Mohnesh Pabrai. Both of whom would be excused from filing by this change. We rely on these small institutional investors' activity for affirmation of our own research as well as an excellent and steady source of already well researched new ideas.
As an indication of the importance and demand for these filings' information, entire websites have been created that are dedicated to these 13f filings like Gurufocus.com, Dataroma.com and WhaleWisdom.com (and at least a dozen more) Gurufocus.com alone has over 500,000 unique visitors a month seeking this information. These are not just sites consolidating the information contained within the 13f filings, they are employers of hundreds of people. These sites all would become incredibly less effective by this change (Gurufocus alone includes over six thousand portfolio managers who currently file that would no longer be required to under the new regulations) and thus many of them will shutter, creating a loss of employment to many who rely on the public demand for this information as the source of their employment. Additionally, the cost of providing this information will have to be shared across a much smaller user base if all the information we could get was on portfolios of $3.5B and above, thus significantly increasing the fees of these sites to the smaller investors trying to follow the professional money managers. We will end up paying more for considerably less information all the while losing the most pertinent information to us, the money managers who manage portfolios between $100M and $3.5B.
In the 1970's, when this regulation was put into effect, the purpose was to disclose portfolios that could move the market to the benefit of other large investors. Today, things have changed. The small investor is looking for more disclosure, not less. Now, this data is used by millions of small investors like me to improve our investing results by using it to confirm our research
and provide new ideas of additional investments we may not have found on our own. We hope you will focus less on what the intent of this regulation was 50 years ago and focus more on how this information is effectively used by the modern-day investing community. Please support the small investor and prioritize the current value of keeping this regulatory requirement in place, just as it has been for almost 50 years. It is more valuable now than ever before.
Thank you for your consideration.
Elizabeth Wong