recentpopularlog in

jerryking : proprietary   24

Investment managers need to become coders, says former CPPIB CEO - The Globe and Mail
CLARE O’HARAWEALTH MANAGEMENT REPORTER
DAVID MILSTEADINSTITUTIONAL INVESTMENT REPORTER

Mark Wiseman is learning Python, one of the world’s top computer programming languages.

The former chief executive officer of the Canada Pension Plan Investment Board is not trying to become a master coder, but instead believes investment managers must become proficient in manipulating large data sets to beat the market.

“If you are waiting to get a company’s quarterly or annual report and you think that is how you’re going to make an investment, you are dead meat,”........

“Sources of information are completely different than they were even 10 years ago for investors,” he says.

Today, BlackRock has already begun using “alternative data sources” to gain more in-depth information on companies such as sales predictions, customer traffic and inventory......“As we look at data in industry and how fast it’s moving, there is going to be an increasing bifurcation between proprietary and non-proprietary data."

Non-proprietary data is information that is readily available on the internet and can easily be used by competitors. Now, money managers are increasingly looking for proprietary data to win a competitive advantage.

For BlackRock’s equities business alone, Mr. Wiseman says the firm has tripled the budget for data over the past two years and holds between 400 and 500 proprietary data sets at a time.......learning Python is a more important skill for a young investment manager than learning foreign languages, or even some of the curriculum taught to chartered financial analysts.

“But this is what investing is about today,” he said. “So those of you who are spending your time on your CFA Level III, that is really nice to have the letters after your name on the business card. But you probably would have been better off spending your time learning how to code Python.”
alternative_data  BlackRock  coding  commoditization_of_information  CPPIB  information_sources  investment_management  Mark_Wiseman  massive_data_sets  proprietary  software_developers  software_development 
october 2019 by jerryking
Opinion | The United Kingdom Has Gone Mad - The New York Times
By Thomas L. Friedman
Opinion Columnist

April 2, 2019

What do the most effective leaders today have in common? They wake up every morning and ask themselves the same questions: “What world am I living in? What are the biggest trends in this world? And how do I educate my citizens about this world and align my policies so more of my people can get the best out of these trends and cushion the worst?”

So what world are we living in?

(1) We’re living in a world that is becoming so interconnected — thanks to digitization, the internet, broadband, mobile devices, the cloud and soon-to-be 5G wireless transmissions — that we are becoming interdependent to an unprecedented degree. In this world, growth increasingly depends on the ability of yourself, your community, your town, your factory, your school and your country to be connected to more and more of the flows of knowledge and investment — and not just rely on stocks of stuff........The key to creating economic value has been to acquire some proprietary knowledge stocks, aggressively protect those knowledge stocks and then efficiently extract the economic value from those knowledge stocks and deliver them to the market. The challenge in a more rapidly changing world is that knowledge stocks depreciate at an accelerating rate. In this kind of world, the key source of economic value shifts from stocks to flows......yet Britain is ruled today by a party that wants to disconnect from a connected world....
(2) Understand that in a world of simultaneous accelerations in technology and globalization, keeping your country as open as possible to as many flows as possible is advantageous for two reasons: You get all the change signals first and have to respond to them and you attract the most high-I.Q. risk-takers, who tend to be the people who start or advance new companies.....The best talent wants to go to the most open systems — open both to immigrants and trade — because that is where the most opportunities are. Britain is about to put up a big sign: GO AWAY.
(3) wise leaders also understand that all the big problems today are global problems, and they have only global solutions: climate change, trade rules, technology standards and preventing excesses and contagion in financial markets......small states/middle powers need to be part of a wider coalition like the European Union.
(4) the best leaders know a little history. Trump is fine with a world of competitive European nationalisms, not a strong European Union. So is Vladimir Putin. So, it seems, are the Brexiteers. How quickly they’ve all forgotten that the E.U. and NATO were built to prevent the very competitive nationalism that ran riot in Europe in the 20th century and brought us two world wars.
21st._century  accelerated_lifecycles  Brexit  EU  historical_amnesia  history  information_flows  interdependence  interconnections  middle-powers  open_borders  proprietary  questions  small_states  talent_flows  technical_standards  Tom_Friedman  United_Kingdom  value_extraction 
april 2019 by jerryking
Marty Chavez Muses on Rocky Times and the Road Ahead
NOV. 14, 2017 | - The New York Times | By WILLIAM D. COHAN.

Mr. Chavez is about as far from the stereotypical Wall Street senior executive as you can imagine, and that is one reason his musings about the future direction of Wall Street are listened to carefully.

He grew up in Albuquerque, one of five children, who all went to Harvard. He got a doctorate in medical information sciences from Stanford University. (At that time, he was known by his full name Ramon Martin Chavez.)

In 1990, Mr. Chavez came out, the day after he defended his doctoral dissertation. – “Architectures and Approximation Algorithms for Probabilistic Expert Systems.” He is one of the few openly gay executives on Wall Street. ......In his current role as Goldman's CFO, Marty views his job as a simple one that is hard to get right: “I’m not paid or evaluated on the accuracy of my crystal-ball predictions,” he said. “I’m paid to enumerate every possible outcome and do something about every possible outcome well in advance, when it’s still possible to do something, because once it’s happened it’s too late.”....Unlike many of his peers on Wall Street, Mr. Chavez does not complain about the extent of the regulation that hit the financial industry as a result of Dodd-Frank. Generally speaking, he says, the regulations have helped banks “confront their problems and capitalize and bolster their liquidity,” making them “stronger as a result,” and the financial system safer and more profitable.....Instead of complaining about the extra expense and manpower required to comply with the mountain of new regulations, Mr. Chavez chooses instead to think about it differently. “If you approach the regulations as ‘Oh, we’ve got to comply,’ you’ll get one result,” he said. He prefers thinking about the regulations as, “This makes us and the system and our clients safer and sounder, and yes it’s a lot of work, but what can we learn from this work and how can we use this work in other ways to make a better result for our shareholders and our clients? Everywhere we look we’re finding these opportunities and they’re very much in keeping with the spirit of the times.”

Like any good senior Goldman executive, he does worry. (Lloyd Blankfein, the Goldman chief executive, once told me he spent 98 percent of his time worrying about things with a 2 percent probability.)

His biggest concern at the moment is the risk of “single points of failure” in the vast world of cybersecurity (JCK: SPOF). He worries about any individual “repository of information” that does not have a backup and that can “be hacked.”

He does not even trust Goldman’s own computer system; he treats it as a potential enemy.

.....What also makes Goldman different from its peers is the firm’s love affair with engineers. At the moment, he said, engineers comprise around 30 percent of Goldman’s work force of about 35,000. It’s what drew him to Goldman in the first place — to work on Goldman’s in-house software, “SecDB,” short for “Securities Database,” an internal, proprietary computer system that tracks all the trades that Goldman makes and their prices, and regularly monitors the risk that the firm faces as a result.

He said the system generates some million and a half points of data that were used to calculate, for the first time, the firm’s “liquidity coverage ratio” — now 128 percent — and that were shared with regulators every day. He’s been busy trying to figure out how the newly generated data can be used to help him understand what the firm’s liquidity will be a year from now.

That way, he said, in his principal role as Goldman’s chief financial officer, he can perceive a problem in plenty of time to do something about it. “We’re able to get much better actionable insights that make the firm a less risky business because we’re able to go much further out into the future,” he said......
actionable_information  CFOs  cyber_security  databases  Dodd-Frank  engineering  financial_system  Goldman_Sachs  improbables  information_sources  jujutsu  low_probability  Martin_Chavez  proprietary  regulation  SecDB  SPOF  think_differently  Wall_Street  William_Cohan  worrying 
november 2017 by jerryking
Buying Competitive Advantage - YouTube
"clock speed"
privileged insights = unfair advantages
value-creation plans

Due diligence helps create privileged insight which needs to be tied to a value creation plan that helps you to achieve it.
competitive_advantage  KPMG  proprietary  insights  customer_insights  clock_speed  value_creation  due_diligence  unfair_advantages 
may 2017 by jerryking
Goldman Sachs Has Started Giving Away Its Most Valuable Software - WSJ
By JUSTIN BAER
Sept. 7, 2016

Securities DataBase, or SecDB, the system remains Goldman’s prime tool for measuring risk and analyzing the prices of securities, and it calculates 23 billion prices across 2.8 million positions daily. It has played a crucial role in many of the seminal moments of the firm’s recent history, including its controversial trading just ahead of the financial crisis.....There is perhaps no better sign of the changes that have engulfed Wall Street than this: Goldman has recently started giving clients the tools that made it a trading powerhouse, for free.

The firm’s motives aren’t altruistic; rather, many of the edges that once made Goldman’s traders feared and admired have been blunted. New rules have limited banks’ trading risks, and made it costly to hold large inventories of stocks and bonds on their books. And electronic trading has squeezed margins, dimming the clamor of trading floors across Wall Street....Traders and executives tap into SecDB to inform how to price securities, and how the value of those assets may change with a twist on the dial on any one of thousands of potential variables. That information can be used to analyze potential trades—and then to monitor the risks posed by those positions.

What made it the envy of Wall Street, though, was its ability to scale up to include new classes of securities, new trading desks, even whole businesses. And the data it harnessed was all in one place.
Wall_Street  Goldman_Sachs  tools  traders  risk-management  informational_advantages  software  free  databases  platforms  CIOs  proprietary  slight_edge  Aladdin  Martin_Chavez  scaling  SecDB  seminal_moments  asset_values  scenario-planning  stress-tests 
september 2016 by jerryking
Make Algorithms Accountable
AUG. 1, 2016 | The New York Times | By JULIA ANGWIN.

An algorithm is a procedure or set of instructions often used by a computer to solve a problem. Many algorithms are secret. ....Algorithms are ubiquitous in our lives. They map out the best route to our destination and help us find new music based on what we listen to now. But they are also being employed to inform fundamental decisions about our lives:
résumés sorting, credit scoring, prediction of a defendant’s future criminality.....as we rapidly enter the era of automated decision making, we should demand more than warning labels [about the algorithms that are being used].

A better goal would be to try to at least meet, if not exceed, the accountability standard set by a president not otherwise known for his commitment to transparency, Richard Nixon: the right to examine and challenge the data used to make algorithmic decisions about us.

Algorithms should come with warning labels. Obama White House called for automated decision-making tools to be tested for fairness, and for the development of “algorithmic auditing.”
tools  automation  decision_making  algorithms  data_driven  transparency  fairness  Richard_Nixon  proprietary  accountability  biases 
august 2016 by jerryking
Software development kit - Wikipedia, the free encyclopedia
A software development kit (SDK or "devkit") is typically a set of software development tools that allows the creation of applications for a certain software package, software framework, hardware platform, computer system, video game console, operating system, or similar development platform. To create applications you have to download this software development kit. For example, if you want to create an Android app you require an SDK with java programming, for iOS apps you require an iOS SDK with swift language, and to develop MS Windows apps you require the .net language. There are also SDKs that are installed in apps to provide analytics and data about activity. Prominent examples include Google and Facebook.
Wikipedia  definitions  software  tools  software_development  proprietary 
october 2015 by jerryking
Goldman Sachs to Give Out ‘Secret Sauce’ on Trading - WSJ
By JUSTIN BAER
Aug. 12, 2015

Goldman will soon offer clients access to more of its in-house tools, such as high-powered databases that analyze markets and manage risk, according to the firm’s executives. Those proprietary systems have long been key elements enabling Goldman to sidestep market turmoil and ring up outsized profits in better conditions.

Given direct access to these tools, Goldman clients could use the technology to build their own trading systems and potentially make purchases independent of the firm.

But the firm’s executives believe the upside outweighs those concerns. Goldman is betting that its clients, such as hedge funds and other money managers, will use the individual applications, or apps, to develop strategies and then execute their trades with the firm.
Goldman_Sachs  tools  risk-management  CIOs  proprietary  traders  trading_platforms  upside  special_sauce 
august 2015 by jerryking
If I was...setting out to be an entrepreneur - FT.com
January 15, 2014 | FT | By Daniel Isenberg.

“Worthless Impossible and Stupid: How Contrarian Entrepreneurs Create and Capture Extraordinary Value”.

...If I were setting out as an entrepreneur today, I would buy an existing company to scale up rather than build a start-up from scratch. I would make incremental tweaks of improvement rather than innovate, exercise cool judgment rather than hot passion and build my departure plan from day one...a lot of great businesses, such as PayPal [the online payments system] and Kaspersky [the internet security company] are carved out of, or combined from, existing assets, or are family businesses taken sky-high by the second or third generation...Rather than start a new company, I would buy a rusty old business to fix up and grow as fast as I could. I want a discarded company that is undervalued but can be dusted off, refurbished with vision and talent, and scaled up. I would be talking to venture capitalists....I know that proprietary technology is not a market maker by itself. Great marketing and management almost always trump big innovation.

Minnovation – small tweaks on existing products – is what moves the ball of economic growth forward. Neither Facebook nor Google, for example, were technology pioneers.

Big innovations are few and far between and are often the stuff of large companies with long patience and deep pockets....Next, I would drain my venture of passion and replace it with commitment, hard work and realistic and relentless self-assessment....start with a stark test of harsh neon lights, exposing every flaw and crack long before the market does so that I can fix them before the customers vote with their feet....plan one's passionless departure from the start, creating a platform to allow the talented people and partners I hire to outperform me very soon.
entrepreneur  entrepreneurship  rules_of_the_game  unglamorous  books  Daniel_Isenberg  advice  howto  passions  exits  lessons_learned  turnarounds  contrarians  scaling  minnovation  undervalued  under-performing  carveouts  family_business  proprietary  incrementalism  self-assessment  customer_risk  breakthroughs  large_companies  vision  refurbished  spin-offs  hard_work  dispassion  marketing  management  commitments  marginal_improvements  unsentimental  outperformance 
january 2014 by jerryking
Venture Firms Build Own Software to Gain an Edge - WSJ.com
May 22, 2013 | WSJ | By EVELYN M. RUSLI.

Sequoia is one of a growing number of Silicon Valley venture-capital firms now creating proprietary software to gain an edge in the increasingly competitive industry.

Some are creating apps to scout potential deals by aggregating data across the Web and their community of companies. Others are building software—like Grove, named after clusters of sequoia trees—to help grow companies they have already invested in.
venture_capital  vc  Sequoia  slight_edge  Silicon_Valley  mobile_applications  data_driven  trends  proprietary  software  internal_systems  investors 
may 2013 by jerryking
Prudential Research Model May Have Been a Dinosaur
June 8, 2007 | WSJ | Scott Patterson.

The decision by Prudential Financial PRU +0.70% to close its stock-research arm doesn't mean research is doomed, but it does signal an important shift. Deep-pocketed investors such as pension funds and hedge funds are hungry for exclusive, specialized research that can give them an edge over competition.

Experts say Prudential's research had become too widely distributed to draw enough interest, or dollars.

"The notion of widespread dissemination of a recommendation, that model is 40 years old," said Mike Thompson, director of research at Thomson Financial. "If you talk to the hedge funds, what they want are ideas that are actionable that not everyone gets."

The trend has given rise to independent, specialized research outfits. There are 63 independent research firms today, up from 14 in 2000, according to Thomson Financial.
equity_research  Wall_Street  investment_research  hedge_funds  pension_funds  exclusivity  nonpublic  slight_edge  proprietary  hard_to_find  novelty  interestingness  actionable_information 
february 2013 by jerryking
Want an edge? Call the CEO - The Globe and Mail
Jul. 03 2012 | The Globe and Mail | FABRICE TAYLOR.

Investing is a game of scarce advantages, yet an edge is difficult to come by in the stock market. You certainly don’t get one by just reading financial statements. A million others are doing that. Ditto with screening tools. They’re useful as a starting point but. again, they’re not exclusive to you.

It’s the same with the Internet. Any monkey can Google, so you’re not going to get an edge by spending hours scouring the darkest corners of the Web.

The only thing that can give you an edge is making connections that few others have, or interpreting what sources say to you.... No matter how much you read, how much time you spend, how elaborate your Excel model, you will never understand a business better than the CEO. Not only do they live and breath their work every day, and likely have for years, they also have information you don’t have. What you look at – the latest results – are dated. He or she has real time and, in fact, advance data.

Q1:one of my favourites is: “Who is the best analyst on your stock and why?”
Q2: Another good question for a CEO who doesn’t appear too promotional is whether it’s a good time to attract a lot of investor attention.

Sponge up insights about their companies and their suppliers, competitors and customers, as well as coming technological changes that could hurt or help a business....investing in one company on the basis of ideas received from another is a “bank shot,” like a basketball bouncing into the hoop. “The ability to look beyond just the numbers to see all different types of bank shots is something that can’t be replicated by a spreadsheet,”
slight_edge  CEOs  due_diligence  proprietary  informational_advantages  Communicating_&_Connecting  interpretation  real-time  questions  humint  financial_statements  insights  exclusivity  personal_knowledge  personal_connections  personal_meetings  personal_relationships  technological_change  bank_shots 
july 2012 by jerryking
Go Ahead, Take a Risk
June 22, 2004 | WSJ | By ADRIAN SLYWOTSKY

What are the risks you should be taking but aren't? Most managers treat risk as an unwanted byproduct of the business. They think narrowly of financial, operating, and hazard risks, such as currency fluctuations, employee fraud, and earthquakes. And they defend themselves through practices like hedging, internal controls, and insurance.

But disruptive strategic risks can be a much larger source of value destruction for a firm. I looked back to the bull market of the 1990s to analyze movements of the Fortune 1000 stocks; even then, before the market collapsed, 10% of stocks lost over one-quarter of their value in a single month, primarily because of strategic-risk events.

The most successful companies do not try to simply minimize strategic risk; they embrace such risk by making prudent bets in their growth-oriented strategies. Strategic risks include not just the obvious, high-probability events that a new ad campaign or new product launch will fail, but other less-obvious risks as well: Customers' priorities will change quickly -- as when baby-boomer parents quickly migrated from station wagons to minivans, catching most automakers off guard. New technology will overtake your product -- as mobile telephony has stolen market share from fixed-line voice. A one-of-a-kind competitor will render your business model obsolete -- as the Wal-Mart tidal wave has washed over mid-range department stores.

Although insurance and hedging can't address strategic risks, there are an array of countermeasures that can, including these three:
1) Smart sequencing for new growth initiatives. Look for incumbents that are moving deliberately, leveraging existing assets and customer relationships to gain the experience, knowledge, and reputation necessary to take the next step with confidence.
2) Proprietary information to reduce the risk of each new initiative. Gather and generate proprietary information that produces a depth of insight into the customer's needs and activities that traditional suppliers cannot match. This will make you a supplier of choice, reducing bidding volatility and allow you to plan with greater certainty.
3) Double betting to minimize the risk of obsolescence. When several versions of a new technology are competing to become the standard, it's impossible to predict which will prevail. So smart managers make double bets. Betting on both Windows and OS/2 positioned Microsoft to be the winner, regardless of which operating system prevailed.

Traditional risk management seeks to contain losses. But that's just one-half of the growth equation. By embracing strategic risk, Cardinal, JCI, and other risk-savvy companies have raised their growth potential in addition to reducing their economic volatility. That's important at a time when aggregate market growth is sluggish: The biggest risk of all is not to take the right growth risks for the business.
leaps_of_faith  Adrian_J._Slywotzky  risk-taking  proprietary  sequencing  scuttlebutt  information  growth  strategic_thinking  Mercer  Oliver_Wyman  product_launches  nonpublic  low_growth  slow_growth  insights  customer_insights  value_destruction  disruption  insurance  new_products  obsolescence  countermeasures  volatility  customer_risk  one-of-a-kind  hedging  overly_cautious  risk-aversion  de-risking  double_betting  risk-management  bull_markets  customer_relationships  dark_data  risk-savvy  internal_controls  financial_risk  risks 
june 2012 by jerryking
Finding a New Niche May Offer Better Chance at Fat Margins - WSJ.com
May 13, 2003 | WSJ | By JEFF BAILEY | Staff Reporter of THE WALL STREET JOURNAL
These days, with information and capital zipping around at warp speed, a business or industry with fat margins essentially has a target painted on its back.

And yet, plenty of small and midsize companies in less-than-glamorous industries manage, some year after year, to post enviable margins. Some have patents or other intellectual property that protect them from competition. Others have invested large sums in plant and equipment to acquire economies of scale that scare off new market entrants. Some defend themselves by knitting together extensive sales-and-distribution networks that would take years to replicate.
patents  intellectual_property  entrepreneur  business_models  dealerships  automotive_industry  barcodes  medical_devices  hospitals  niches  unglamorous  differentiation  proprietary  small_business  mid-market  barriers_to_entry  economies_of_scale  margins  warp_speed  defensive_tactics  distribution_channels 
may 2012 by jerryking
How to Build Your Network
December 2005 | HBR | Brian Uzzi and Shannon Dunlap.

Strong personal networks don't just happen at the watercooler. They have to be carefully constructed.Networks offer three unique advantages: private information, access to different skills and power. Leaders see the benefits of working every day, but perhaps not pause to examine how their networks are governed....Here's how to strengthen your connections.

Paul Revere was an information broker, a person who occupies a key role in a social network by connecting disparate groups of people....Networks determine which ideas become breakthroughs, which new drugs are prescribed, which farmers cultivate pest-resistant crops, and which R&D engineers makes the most high impact discoveries....When we make judgments, we use both public and private information. These days, public information is readily available from various sources, including the Internet, but precisely because it is so accessible, public information provides a competitive advantage much less than usual. Privacy, however, gathered from personal contacts that can offer something unique that can not be found in public spaces such as the release of a new product, the novel software code, or knowledge of this what a particular investigator seeks in candidates. Private information, therefore, may provide an advantage for executives, but is more subjective than public information, because it usually is not marked by an independent third party, such as Dun & Bradstreet. Therefore, the value of your private information to others and the value of your private information depends on how much confidence exists in the network of relationships....the best way to have a good idea is to have a lot of ideas....And when you trade information or skills with people whose experiences differ from your own, you provide one another with unique, exceptionally valuable resources....Power was repositioned in the network's information brokers, who could adapt to changes in the organization, develop clients, and synthesize opposing points of view.
These brokers weren't necessarily at the top of the hierarchy or experts in the field, but they linked specialists in the firm with trustworthy and informative ties.
networking  social_networking  social_capital  HBR  howto  networks  nonpublic  confidence  slight_edge  proprietary  relationships  exclusivity  public_information  private_information  inequality_of_information  homogeneity  heterogeneity  dual-consciousness  power_brokers  network_power  personal_chemistry  personal_connections  judgment  prolificacy  subjectivity  information_brokers  intentionality 
march 2012 by jerryking
Seth's Blog: The Scarcity Shortage
Aug. 27, 2007 | Seth Godin.

Scarcity has a lot to do with value. Scarcity is the cornerstone of our economy. The best way to make a profit is by trading in something that's scarce.

How to deal with the shortage of scarcity? Well, the worst strategy is whining--about copyright laws/fair trade/how hard you've worked. etc. Start by acknowledging that most of the profit from your business is going to disappear soon. Unless you have a significant cost adv. (e.g. Amazon's or Wal-Mart's), someone with nothing to lose is going to offer a similar product for less $.....So what's scarce now? Respect. Honesty. Good judgment. L.T. relationships that lead to trust. None of these things guarantee loyalty in the face of cut-rate competition, though. So I'll add: an insanely low-cost structure based on outsourcing everything except your company's insight into what your customers really want to buy. If the work is boring, let someone else do it, faster & cheaper than you ever could. If your products are boring, kill them before your competition does. Ultimately,
what's scarce is that kind of courage--which is exactly what you can
bring to the market.
scarcity  Seth_Godin  customer_loyalty  respect  judgment  honesty  whining  trustworthiness  inspiration  entrepreneurship  proprietary  cost-structure  relationships  kill_rates  courage  customer_insights  insights  competitive_advantage  low-cost 
october 2010 by jerryking
How to tell good buys from bad: Talk to people, trust your gut
Jun 3, 2006 | Globe & Mail | by Avner Mandelman. 2 mths
ago Giraffe put an ad in RoB, looking for a research analyst. We asked
for a 1-pg. résumé, a half-pg. letter, and a 1-pg. tech stock pick/pan.
All presented themselves well, and some even gave interesting stock
picks/pans. Two things were missing: First, nearly all had based their
analysis on public, 2nd-hand data -- the kind that everyone else sees
also. Very few did primary field research and none thought it important
to highlight exclusive info. Instead, the recommendations were rife
with data copied from the Web, corporate filings or famous analysts'
reports. The interviewees saw their role as financial scientists
massaging data gathered by others, rather than gatherers of exclusive
info themselves. Second, very few spoke of the company's people: the
character of their pick's CEO, the trustworthiness of the CFO, or the
high integrity of the company's team viz. a viz the competition. This
lack of people-mention was glaring.

===========================================
A technique for finding out information about companies. When you talk to people , you do not ask them to talk about their company. What you do is ask them to talk about the other company. That is not reg FD or insider information per se. It is their observations on the generalized business conditions and what the other companies are doing. Folks like to shoot their mouths off about other people
Avner_Mandelman  research_methods  hiring  sleuthing  due_diligence  proprietary  exclusivity  primary_field_research  secondary_research  research_analysts  gut_feelings 
february 2010 by jerryking
To get an investment edge, learn to recognize business stars
Feb 10, 2007 | The Globe & Mail pg. B.9 | by Avner
Mandelman. Therefore, if you invest, see yourself as a business fan, and
pay attention to individual business stars: Follow their careers, learn
what they do and how they do it, what they succeed in and where they
fail -- and try to remember what they look like. If you do that, you'll
often have an edge over those who don't. Sure, you must know the
numbers, too, and the industry. But if you can identify a young
business-Kobe-Bryant joining -- or quitting -- a company, you may take
the money of those who only see a press release. Star talent matters
greatly, both in sports, and in business.
Avner_Mandelman  sleuthing  scuttlebutt  proprietary  star_power  slight_edge  Bay_Street  sports  Pablo_Picasso  talent  personal_knowledge  pay_attention 
february 2010 by jerryking
Turing was right: Don't be ruled by words and numbers
January 13, 2007 | Globe & Mail | by AVNER MANDELMAN.
Numbers alone aren't enough. You must seek out physical facts too,
because that's where the exclusive edge is. But if you have read this
column before, surely you know all this. So why am I mentioning it
again? Because when I interviewed analysts prior to hiring one, I found
that fresh MBAs or those with a CFA designation have never been taught
to do physical sleuthing. In fact the entire CFA material never mentions
physical investigation. It's all done by numbers and letters -- which
are, of course, reflections of reality, not physical reality itself.
The implicit assumption then is that screen blips and printed matter can
capture the full human drama of commercial conflict -- which, after
all, is what business truly is. But is this assumption valid? Can
letters and numbers alone tell you whether a company's president is
competent and trustworthy?
Avner_Mandelman  sleuthing  proprietary  due_diligence  scuttlebutt  physical_place  personal_knowledge 
february 2010 by jerryking
Goldman Sachs Rakes In Profit in Credit Crisis - NYTimes.com
November 19, 2007 | New York Times | By JENNY ANDERSON and
LANDON THOMAS Jr.
At that point, the holdings of Goldman’s mortgage desk were down
somewhat, but the notoriously nervous Mr. Viniar was worried about
bigger problems. After reviewing the full portfolio with other
executives, his message was clear: the bank should reduce its stockpile
of mortgages and mortgage-related securities and buy expensive insurance
as protection against further losses, a person briefed on the meeting
said.
Rarely on Wall Street, where money travels in herds, has one firm gotten
it so right when nearly everyone else was getting it so wrong.
With its mix of swagger and contrary thinking, it was just the kind of
bet that has long defined Goldman’s hard-nosed, go-it-alone style.
Goldman’s secret sauce, say executives, analysts and historians, is
high-octane business acumen, tempered with paranoia and institutionally
encouraged — though not always observed — humility.
====================================

Strategic nous - "practical intelligence/good judgement/shrewdness" = "high-octane business acumen"
business_acumen  contrarians  crisis  economic_downturn  Goldman_Sachs  hard_times  herd_behaviour  herd_instincts  humility  Lloyd_Blankfein  paranoia  profits  proprietary  recessions  special_sauce  stockpiles  Wall_Street 
february 2010 by jerryking
Seth Godin on What it Takes to be a Linchpin [INTERVIEW]
Feb. 14, 2010 | Mashable | Interview of Seth Godin by Steve
Cunningham is the CEO of Polar Unlimited, a digital marketing agency.
In his book — Linchpin: Are You Indispensable? — Seth Godin poses a
challenge: Take your gift, whatever it is, and use it to change the
world. As Godin says, “a linchpin is the essential element, the person
who holds part of the operation together. Without the linchpin, the
thing falls apart.” "If I told you, step-by-step, what to do to become
indispensable, then anyone could do it. And if anyone could do it, it
wouldn’t be worth very much. Scarcity creates value. And, this is going
to frustrate people, but the emotional labor of work, today — the thing
that makes you worth $50,000 or $100,000 or $150,000 a year — is that
you can navigate the world without a map. People who need a map, are
going to get paid less and less and work harder and harder every day,
because there’s plenty of those people, and I can find them with a click
of the mouse."
Seth_Godin  indispensable  howto  entrepreneur  inspiration  scarcity  interviews  proprietary  sense-making  ambiguities  uncertainty  navigation  non-routine  uncharted_problems 
february 2010 by jerryking
Switch to the low-income customer
14-Nov-2005 | Financial Times | By Jeremy Grant. "When AG
Lafley came in [in 2000] and said, 'We're going to serve the world's
consumers', that led us to say, 'We don't have the product strategy, the
cost structure, to be effective in serving lower income consumers'.
"What's happened in the last five years has been one of the most
dramatic transformations I've seen in my career. We now have all of our
functions focused on that," says Mr Daley. P&G, the world's largest
consumer goods company, devotes about 30 %of its $1.9bn in annual
research and development spending to low-income markets, a 50 % increase
from 5 yrs. ago. Consumer research: spend time in consumers' homes to
gain insights into daily habits; Cost innovation: use proprietary
technology to design low-income products; Innovation productivity: use
"matchmakers" such as InnoCentive; Manufacturing efficiency: cut mfg.
costs by developing a network of suppliers in China, Brazil, Vietnam and
India.
P&G  BRIC  market_research  consumer_research  primary_field_research  customer_insights  innovation  Bottom_of_the_Pyramid  A.G._Lafley  InnoCentive  supply_chains  China  Brazil  Vietnam  India  observations  insights  cost-structure  jugaad  proprietary  behavioural  cost-cutting  match-making  CPG  low-income 
december 2009 by jerryking
Seeking an Edge, Big Investors Turn to Network of Informants - WSJ.com
NOVEMBER 27, 2006 WSJ article by LAURIE P. COHEN profiling Mark
Gerson and his research firm, Gerson Lehrman. The firm is an
information broker to hedge funds and private-equity firms. These
private investment firms, which are loosely regulated, have Gerson
Lehrman Group, for information they hope will provide them with an
investing edge
research  investing  information  Gerson_Lehrman  proprietary  inequality_of_information  scuttlebutt  due_diligence  expert_networks  market_intelligence  slight_edge  private_information 
march 2009 by jerryking
Information Haves and Have-Nots - WSJ.com
Sept. 22, 2008 | Wall Street Journal | by L. Gordon Crovitz.
Piece on the ramifications of not having access to good information has
had on pricing securities. No one asks the right questions as research
analysts desert Wall Street.
======================================
...The credit crunch can be reduced to a single word. Not "greed," which also exists in stable markets. The word is "information," the absence of which has put taxpayers on the hook for billions, ruined Bear Stearns and Lehman Brothers, and led to the fire sale of Merrill Lynch and AIG. The continuing absence of information about the true value of underlying securities means no one knows when the market has hit a new normal for the important purpose of rebuilding.

Why did so many smart people at so many top firms make dodgy investments? Why were there so many unknown unknowns, now at least becoming known unknowns? One explanation is the absence of warnings from research analysts. For decades, the large Wall Street brokerages had armies of analysts who, when they did their jobs right, asked the hard questions and issued tough reports that often alerted both company executives and public investors to market-moving issues.

There are now about half as many Wall Street analysts as in 2000......."Research analysts have gone the way of high-button shoes and buggy whips." Alas, unknown risks have not. The now-former senior executives at Bear Stearns, Lehman and Merrill must wish they had been able to retain all their star banking analysts. Those analysts just might have waved enough red flags -- in public or even in the hallways of the banks themselves -- to alert management to risks in their portfolios......a few of those analysts left these Wall Street firms for the "buy side," such as hedge funds, which keep their research proprietary, for their own trading. Predictably, it was well-informed short sellers at these firms who first alerted the market to the true value of credit derivatives and other mispriced instruments by driving down shares of firms such as Lehman.

At a time when real understanding is at a premium, we're increasingly in a world of information haves and have-nots......A corollary is that proprietary information will be more valuable than ever, giving well-informed traders an even bigger edge.

What's the solution? The temporary ban on short selling of financial firms will have the unintended effect of worsening the information gap. Professionals will perform the equivalent of short selling through nontransparent instruments and markets, leaving individual investors to be guided by public share prices that no longer reflect all known information......Part of the answer came in news earlier this month that Credit Suisse will make macroeconomic research from its analysts available to noninvestor clients of Gerson Lehrman Group, a powerful force in the world of independent research such as for hedge funds. Equity researchers from Credit Suisse joined the some 200,000 expert consultants that Gerson Lehrman has attracted to its network.......Clients of Gerson Lehrman pay hefty fees to tap this deep knowledge through one-on-one phone calls and meetings. Serving these clients will help Credit Suisse fund its 700-person research department.

When Gerson Lehrman launched a decade ago, it was to serve the deep information needs of investors in highly technical areas such as health and biotechnology. As Wall Street analysts began to leave the scene, it brought on experts in virtually every industry globally, with 150 research managers to help clients conduct more than 10,000 consultations monthly. These are often on arcane topics, such as the likely growth in salmon farming in Norway, or the odds of success for a particular drug trial. Perhaps some research was even done on, say, the proper pricing of derivatives.

Regulators can try to put genies back in bottles, but complex financial instruments that, when properly used, create value will only become more commonplace. Innovation will also be required for better-informed markets. By recruiting a huge number of experts and using online social-media tools to connect them to clients, firms like Gerson Lehrman can bring information, knowledge and insights to the people who most value and need it.
arcane  asking_the_right_questions  buy_side  equity_research  expert_networks  financial_instruments  Gerson_Lehrman  hedge_funds  information  information_gaps  information-poor  information-rich  L._Gordon_Crovtiz  market_intelligence  proprietary  regulators  research_analysts  selling_off  short_selling  uncertainty  unintended_consequences  unknowns  Wall_Street 
january 2009 by jerryking

Copy this bookmark:





to read