Editor's note: President Donald Trump's second term is off to a busy start. Most of his moves are being driven by one thing – deregulation. And Joel Litman of our corporate affiliate Altimetry says that thanks to these efforts, we're likely to see major changes in the stock market.

In today's Weekend Edition, we're taking a break from our usual fare to share a recent issue of the Altimetry Daily Authority free e-letter. In it, Joel explains how outdated rules have long hidden the truth from investors... and why that could soon change.

The first few weeks of Donald Trump's second presidential term have been a whirlwind of announcements.

From creating the new Department of Government Efficiency ("DOGE")... to freezing all rulemaking progress... reclassifying workers... and signing the Unleashing American Energy executive order... it has been hard to keep track of everything coming out of the Oval Office.

Underneath it all, though, Trump has one ultimate goal...

Unleash a wave of deregulation like we've never seen before.

Make no mistake – if the president gets his way, deregulation will reach every corner of the government. And investors should be paying attention to one area in particular...

You see, Trump has already named Paul Atkins to be the new head of the U.S. Securities and Exchange Commission ("SEC"). Atkins has been described as a "deregulation zealot."

And he has a particular problem with generally accepted accounting principles ("GAAP"). He says the rules-based approach of GAAP accounting prevents companies from showing their true performance.

And I couldn't agree more...

As it stands, GAAP accounting is useful for accountants... and not much else. It's simply not designed for investors.

It's not just me (and Atkins), though. In fact, nobody seems to understand the problems with as-reported accounting better than legendary investor Warren Buffett...

Like any public executive, Buffett has to start the Berkshire Hathaway (BRK-B) annual meeting by laying out the GAAP-sanctioned financial results.

In 2023, the company allegedly minted a massive $96 billion in net income... much better than its nearly $23 billion loss the year prior.

This has nothing to do with the business doing that much better or worse, year over year. GAAP is to blame.

As a holding company, Berkshire has a lot of stock investments – which, of course, move up or down often. And under GAAP, it's required to report those movements as gains and losses... even if it's not selling anything.

So Berkshire recorded a $68 billion loss on its investments in 2022. These were only losses on paper, though. The business didn't actually lose any cash.

Understandably, Buffett is more than a little irritated by these rules. He shares a different metric – operating earnings – alongside net income in his annual letters.

He also shares plenty of his thoughts on GAAP reporting, like this one...

So sanctified, this worse-than-useless "net income" figure quickly gets transmitted throughout the world via the internet and media. All parties believe they have done their job – and, legally, they have.

Using operating earnings, we see that Berkshire is far more stable. Instead of swinging by more than $100 billion from year to year, earnings rose steadily, from $31 billion in 2022 to $37 billion in 2023.

Not every public company has a Warren Buffett at the helm, though. Many simply accept the GAAP numbers, even though they're often misleading.

And even Buffett can't just tell Berkshire investors how to accurately evaluate his business. He's required to share the company's GAAP results... then try to convince investors to pay attention to his adjusted numbers.

But under Atkins, the financial world could finally start shifting its mindset...

While GAAP reporting will likely stick around for some time, it may no longer be central to every annual report and earnings call.

We believe Atkins will push the SEC to allow expanded non-GAAP metrics, disclosures, and data points. He has already voiced plans to encourage companies to report non-GAAP financials alongside GAAP numbers.

In short, a flood of much-improved data could soon hit the market. Companies could finally have more flexibility to share the data that accurately represents their businesses.

That could change the fortunes of a lot of stocks that have been kept deflated by GAAP accounting.

And that makes today an exciting time to be "in the know" about Uniform Accounting... the method we use at Altimetry.

Our entire approach is designed to highlight companies' real performance – the results hidden by traditional GAAP metrics.

We've spent years cutting through the GAAP "noise" to bet on misunderstood stocks with tremendous upside potential.

And under Atkins' reign, the rest of the market could start to see what we do... far faster than ever before.

We'll be ready.

Regards,

Joel Litman

Editor's note: For years, companies like Meta Platforms and Amazon have manipulated their financial data... all because of the SEC's obscure rule on financial reporting. But now, Trump's push to remove regulations like this could upend everything. And Joel says this change could trigger triple-digit gains in a select group of little-known stocks... Click here for the full details.