What Is the Mosaic Theory for Investors?

By Kristi Waterworth – Updated May 27, 2025 at 4:45 PM EST | Fact-checked by Frank Bass

Key Points

Mosaic Theory analyzes a company by blending public and private, material and non-material info.
Effective use includes evaluating performance, industry trends, and management quality.
Insider trading risks arise if non-public, material information is used in analysis.

Investors are always looking for new and better ways to evaluate potential stock purchases, as well as existing holdings. The Mosaic Theory is a technique that grabs loads of information from a variety of sources to help determine the health of a company and the value of its stock.

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Person in front of blackboard with investing-related pictures and words drawn on it. — Image source: Getty Images.

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Mosaic Theory and insider trading

Because non-public information is sometimes used along with Mosaic Theory, there have been situations where applying this theory has either led to or come dangerously close to insider trading. The only private information that's considered ethically OK to use with Mosaic Theory is non-material information; if any material information is located or considered, it changes the entire picture.

When using Mosaic Theory, especially for professional analysts, every effort should be made to completely and transparently disclose where information originated, how it is used, and why that information was chosen. This can help to avoid accusations of insider trading, though Mosaic Theory itself is not a defense against such accusations. People can and do cross the line using this technique and are still responsible for their actions.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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