Red Light, Green Light—Part One
You are about to read probably the single most important thing about trading in the stock market you have ever read or ever will read. I call it “Red-Light, Green- Light.” This pearl of business wisdom was found through years of struggle, and you minimize this process at your trading peril. Watch and be wise.

CHRONOLOGICAL CONNECTIONS

In May of 1995 I took our company public. Our assets grew rapidly and we became a reporting company June 30, 1996, when the quarterly SEC reports are filed. The June 30 quarterly reports actually had to be filed within 45 days, or by August 15. This important point will come back into play later. Read on.

For years my accounting and legal departments have worked on our quarterly and annual reports. During this quarterly process, there are windows that open or close on what I as a CEO, Board member and insider can say. There are also specific time periods when I can and cannot sell my own company’s stock.

After years of complying—being careful when to buy and sell, and being careful of what I say and when—I started observing things. Here it is plain and simple: News drives stock prices. Everyone knows this. But it is only one component, one piece of the puzzle.

Here’s the question I asked myself. If I, as a CEO, am under all these restrictions—these open and closed window periods of time—then what about the 25,000 or so other CEOs, CFOs, COOs, CLOs, Boards of Directors and other insiders of all publicly traded companies in this wonderful country? Are they not under the same requirements?

IMPORTANT DATES: I’ll explain all of these as we move along, but first some important dates.
Dec. 31 This is the year end for most companies. Companies must file their 10Ks within 90 days. Most companies file their reports with weeks, or a month or so.
March 31 SEC filings must be submitted for the whole year, and this document must be audited by an outside firm. The filing deadline is March 31.
March 31 This is also the end of the first calendar quarter for most companies—all those having a December 31st year end. This is about 80% of all companies. These companies have 45 days to file their 10Qs.
June 30 This date is the calendar quarter end. Quarterly SEC filings may be unaudited.
Sept. 30 End of 3rd Quarter. ALL QUARTERS: Filings are due 45 days later, on May 15, August 15 and November 15. Do you see an overlapping time period in the March 31 area?
Dec. 31 Filings for the previous year need to be made as a company is just finishing up its first quarter—March 31st. So you see, the year ended and the Annual (10K) must be filed by March 31st. However, March 31st is the 1st quarter end. That filing must be submitted by May 15th.
LAST QUARTER OF ANY YEAR END: Most companies do their 4th quarter and their year-end filing at the same time.

You can think through these quiet periods, what I call Red Light, Green Light Periods. Red doesn’t mean bad, it means a quiet period. Conversely, Green doesn’t mean good, necessarily, it just means an active news period.
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