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jerryking : traders   51

Commodity trading enters the age of digitisation
July 9, 2018 | Financial Times | by Emiko Terazono.

Commodity houses are on the hunt for data experts to help them gain an edge after seeing their margins squeezed by rivals......commodity traders are seeking ways of exploiting their information to help them profit from price swings.

“It is really a combination of knowing what to look for and using the right mathematical tools for it,” ........“We want to be able to extract data and put it into algorithms,” .......“We then plan to move on to machine learning in order to improve decision-making in trading and, as a result, our profitability.” The French trading arm is investing in people, processes and systems to centralize its data — and it is not alone.

“Everybody [in the commodity world] is waking up to the fact that the age of digitisation is upon us,” said Damian Stewart at headhunters Human Capital.

In an industry where traders with proprietary knowledge, from outages at west African oilfields to crop conditions in Russia, vied to gain an upper hand over rivals, the democratisation of information over the past two decades has been a challenge......the ABCDs — Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus Company — all recording single-digit ROE in their latest results. As a consequence, an increasing number of traders are hoping to increase their competitiveness by feeding computer programs with mountains of information they have accumulated from years of trading physical raw materials to try and detect patterns that could form the basis for trading ideas.......Despite this new enthusiasm, the road to electronification may not come easily for some traders. Compared to other financial and industrial sectors, “they are coming from way behind,” said one consultant.

One issue is that some of the larger commodities traders face internal resistance in centralising information on one platform.

With each desk in a trading house in charge of its profit-and-loss account, data are closely guarded even from colleagues, said Antti Belt, head of digital commodity trading at Boston Consulting Group. “The move to ‘share all our data with each other’ is a very, very big cultural shift,” he added.

Another problem is that in some trading houses, staff operate on multiple technology platforms, with different units using separate systems.

Rather than focusing on analytics, some data scientists and engineers are having to focus on harmonising the platforms before bringing on the data from different parts of the company.
ADM  agribusiness  agriculture  algorithms  artificial_intelligence  Bunge  Cargill  commodities  data_scientists  digitalization  machine_learning  traders  food_crops  Louis_Dreyfus  grains  informational_advantages 
july 2018 by jerryking
Big Investors Don’t Want Wall Street Analysts Snooping on Them - WSJ
June 14, 2018 | WSJ | By Telis Demos

the research shops are finding ways to make up the lost revenue, turning to readership data. They do say that information is power, and in this case I guess the banks have the power again.
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I think the WSJ is conflating two very different issues. The privacy concerns apply on ethical (possibly criminal) grounds rather than moral ones, in the example given of hedge funds asking a broker to provide aggregated readership data. It's very hard to imagine a responsible research provider doing this. The other piece - the tracking of utilization of research product is exactly what brokers need to do to ensure they are being paid appropriately for the level of service a client is receiving. MiFID 2 has and will continue to put pressure on how much research clients consume, and to precisely account for how much they pay for it. Transparency is a two-way street. A 90-day embargo on the readership data is a simple solution, as quarterly/bi-annual reviews should suffice to true-up the bank/client ledger.

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behavioural_data  investment_research  institutional_investors  reading  research_analysts  snooping  traders  Wall_Street  buy_side  informational_advantages  privacy  transparency 
june 2018 by jerryking
Pentagon Turns to High-Speed Traders to Fortify Markets Against Cyberattack
Oct. 15, 2017 7| WSJ | By Alexander Osipovich.

"What it would be like if a malicious actor wanted to cause havoc on U.S. financial markets?".....Dozens of high-speed traders and others from Wall Street are helping the Pentagon study how hackers could unleash chaos in the U.S. financial system. The Department of Defense’s research arm, DARPA, over the past year and a half has consulted executives at high-frequency trading firms and quantitative hedge funds, and people from exchanges and other financial companies, participants in the discussions said. Officials described the effort, the Financial Markets Vulnerabilities Project, as an early-stage pilot project aimed at identifying market vulnerabilities.

Among the potential scenarios: Hackers could cripple a widely used payroll system; they could inject false information into stock-data feeds, sending trading algorithms out of whack; or they could flood the stock market with fake sell orders and trigger a market crash......Among potential targets that could appeal to hackers given their broad reach are credit-card companies, payment processors and payroll companies such as ADP, which handles the paychecks for one in six U.S. workers, participants said.....The goal of Darpa’s project is to develop a simulation of U.S. markets, which could be used to test scenarios, Such software would need to model complex, interrelated markets—not just stocks but also markets such as futures—as well as the behavior of automated trading systems operating within them....Many quantitative trading firms already do something similar.......
In 2009, military experts took part in a two-day war game exploring a “global financial war” involving China and Russia, according to “Currency Wars: The Making of the Next Global Crisis,” a 2011 book by James Rickards. ....“Our charge at Darpa is to think far out,” he said. “It’s not ‘What is the attack today?’ but ‘What are the vectors of attack 20 years from now?’”
Pentagon  financial_markets  financial_system  vulnerabilities  DARPA  traders  hedge_funds  Wall_Street  hackers  books  rogue_actors  scenario-planning  cyber_security  cyber_warfare  cyberattacks  high-frequency_trading  pilot_programs  contagions 
october 2017 by jerryking
Law firms will pay price for failure to hold off hackers | Evernote Web
31 December/1 January 2017 | Financial Times | Brooke Masters.

"This case of cyber meets securities fraud should serve as a wake-up call for law firms around the world: You are and will be targets of cyber hacking, because you have information available to would-be criminals," Bharara said in a statement....Other professional services firms should take note. This is not the first time the industry has been hit by hackers who specialise in what is becoming known as "outsider trading"....Accounting firms that provide tax advice on mergers, boutique advisory forms, and consultants who weigh in on synergies and downsizing plans are almost certainly on the criminals' hit list....Professional service firms will not be so lucky. Banks and companies pay extremely high prices for outside advice. They expect professionalism and confidentiality in return. Getting hacked by a bunch of Chinese traders is hardly a strong recommendation of either.
Big_Law  Chinese  confidentiality  cyber_security  cyberattacks  hackers  hacking  law_firms  M&A  malware  mergers_&_acquisitions  Preet_Bharara  professional_service_firms  SEC  security_consciousness  securities_fraud  traders 
january 2017 by jerryking
At BlackRock, a Wall Street Rock Star’s $5 Trillion Comeback - The New York Times
SEPT. 15, 2016 | NYT | By LANDON THOMAS Jr.

(1) Laurence Fink: “If you think you know everything about our business, you are kidding yourself,” he said. “The biggest question we have to answer is: ‘Are we developing the right leaders?’” “Are you,” he asked, “prepared to be one of those leaders?”

(2) BlackRock was thriving because of its focus on low-risk, low-cost funds and the all-seeing wonders of Aladdin. BlackRock sees the future of finance as being rules-based, data-driven, systematic investment styles such as exchange-traded funds, which track a variety of stock and bond indexes or adhere to a set of financial rules. Fink believes that his algorithmic driven style will, over time, grow faster than the costlier “active investing” model in which individuals, not algorithms, make stock, bond and asset allocation decisions.

Most money management firms highlight their investment returns first, and risk controls second. BlackRock has taken a reverse approach: It believes that risk analysis, such as gauging how a security will trade if interest rates go up or down, improves investment results.

(3) BlackRock, along with central banks, sovereign wealth funds — have become the new arbiters of "flow.“ It is not about the flow of securities anymore, it is about the flow of information and indications of interest.”

(4) Asset Liability and Debt and Derivatives Investment Network (Aladdin), is BlackRock's big data-mining, risk-mitigation platform/framework. Aladdin is a network of code, trades, chat, algorithms and predictive models that on any given day can highlight vulnerabilities and opportunities connected to the trillions that BlackRock firm tracks — including the portion which belongs to outside firms that pay BlackRock a fee to have access to the platform. Aladdin stress-tests how securities will respond to certain situations (e.g. a sudden rise in interest rates or what happens in the event of a political surprise, like Donald J. Trump being elected president.)

In San Francisco, a team of equity analysts deploys data analysis to study the language that CEOs use during an earnings call. Unusually bearish this quarter, compared with last? If so, maybe the stock is a sell. “We have more information than anyone,” Mr. Fink said.
systematic_approaches  ETFs  Wall_Street  BlackRock  Laurence_Fink  asset_management  traders  complacency  future  finance  Aladdin  risk-management  financiers  financial_services  central_banks  money_management  information_flows  volatility  economic_downturn  liquidity  bonds  platforms  frameworks  stress-tests  monitoring  CEOs  succession  risk-analysis  leadership  order_management_system  sovereign_wealth_funds  market_intelligence  intentionality  data_mining  collective_intelligence  risk-mitigation  rules-based  risks  asset_values  scaling  scenario-planning  databases 
september 2016 by jerryking
Understanding SecDB: Goldman Sachs’s Most Valued Trading Weapon - WSJ
By JUSTIN BAER
Sept. 7, 2016

traders use the system to track how a position would have performed over the past year, how it might do in the future under different scenarios, and how the holding might alter their broader portfolio. They can also use the system to help determine a price to charge the trade’s counterparty.

But traders aren’t SecDB’s only users. The firm’s risk managers use the system to peer into positions held by a trading desk or business to determine aggregate exposures.

Every Wall Street firm has tools to run each of those functions. But SecDB’s power comes from its universal use throughout the firm, its flexibility to add new variables or new sources of information, and its ability to tap into all of Goldman’s data.
Goldman_Sachs  traders  Wall_Street  databases  counterparties  information_sources  SecDB 
september 2016 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
BlackRock to Push Wall Street Chat Tool - WSJ
By JUSTIN BAER and SARAH KROUSE
June 23, 2016

At Goldman Sachs Group Inc., a Symphony investor that contributed its own messaging developments to the platform, the service is now used by most of the firm’s employees across all of its businesses, according to a person familiar with the situation. Goldman traders, for instance, use Symphony to communicate with back-office employees charged with settling trades.

Elsewhere, though, Symphony remains little used or, in some cases, virtually unknown.

Of about a dozen employees reached at financial firms that have invested in the service, some were only aware of small-scale pilot programs in specific corners of their trading floors.

The lack of broader takeup has sown doubts that Symphony would become an alternative to Bloomberg’s multipronged service that costs financial firms $22,000 to $25,000 per employee a year. After attracting bankers and investors to its chat service, Symphony aims to pipe in data, news and other tools, coming closer to the array of functions Bloomberg provides. Symphony charges companies $15 a month per user for the chat service.
BlackRock  messaging  Symphony  Bloomberg  Goldman_Sachs  pilot_programs  traders  back-office  small-scale  chat  Communicating_&_Connecting 
june 2016 by jerryking
Hedge Funds’ Idea Man - WSJ
By JULIET CHUNG
Jan. 4, 2016

The 54-year-old Brazilian immigrant is part of a larger ecosystem of consultants who sell their investment beliefs to hedge funds. The funds, hungry for returns or cheap hedges for their portfolios, get fresh ideas that comprise or inform their wagers. The consultants, in exchange, often expect to share in gains tied to their ideas, they and their clients said.....The ideas don’t always result in profits. ...Such arrangements make some veteran investors in hedge funds uneasy.

“If your manager’s renting a lot of ideas, you have to question the value-add they bring to the partnership,” said Chuck Bryceland of New York-based Bessemer Trust, which advises wealthy families and individuals on investments, including in hedge funds. “We want our people generating primary trade ideas and doing the primary work themselves.”
investment_advice  investment_research  ideas  Wall_Street  money_management  private_banking  hedge_funds  shareholder_activism  traders  exclusivity  idea_generation  value_added  financial_advisors  high_net_worth  Bessemer  Bessemer_Trust 
january 2016 by jerryking
What my Goldman Sachs training taught me about entrepreneurship - FT.com
March 31, 2015 2:17 pm
What my Goldman Sachs training taught me about entrepreneurship
Jason Gissing
United_Kingdom  alumni  Goldman_Sachs  London  entrepreneur  traders 
november 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
Glencore’s Glasenberg Makes His Boldest Move Yet - WSJ
By ANDREW PEAPLE and ALEXIS FLYNN in London and RHIANNON HOYLE in Sydney CONNECT
Updated Oct. 7, 2014
Glencore  mining  traders  Rio_Tinto  commodities 
october 2014 by jerryking
Ex-Currency Trader Braves Tumultuous Market - NYTimes.com
By JENNY ANDERSON SEPTEMBER 17, 2014.

The forex market is being radically reshaped by new regulation and technology.

Mark Taylor, dean of Warwick Business School and a professor of finance, said he expected more regulation. “It’s a tough market to regulate because by definition, it’s a global financial market,” he said. “So where do you regulate it?”

Many banks have quietly lamented changes in foreign exchange market, specifically a move toward more online and thus transparent trading where spreads are thinner and profits smaller, but Mr. Sabet appeared more reconciled to the changes.

“The financial world is being completely regulated,” he said. Everything is becoming electronic and automated, he said, which makes compliance easier. “A human can’t make a mistake because a human is not involved.”
currencies  traders  London  fin-tech  foreign_exchange  turbulence  turmoil  volatility 
september 2014 by jerryking
M.I.T.'s Alex Pentland: Measuring Idea Flows to Accelerate Innovation - NYTimes.com - NYTimes.com
April 15, 2014 | NYT | By STEVE LOHR.

Alex Pentland --“Social Physics: How Good Ideas Spread — The Lesson From a New Science.”

Mr. Pentland has been identified with concepts — and terms he has coined — related to the collection and interpretation of all that data, like “honest signals” and “reality mining.” His descriptive phrases are intended to make his point that not all data in the big data world is equal....Reality mining, for example, examines the data about what people are actually doing rather than what they are looking for or saying. Tracking a person’s movements during the day via smartphone GPS signals and credit-card transactions, he argues, are far more significant than a person’s web-browsing habits or social media comments....Central to the concept of social physics is the ability to measure communication and transactions as never before. Then, that knowledge about the flow of ideas can be used to accelerate the pace of innovation.

The best decision-making environment, Mr. Pentland says, is one with high levels of both “engagement” and “exploration.” Engagement is a measure of how often people in a group communicate with each other, sharing social knowledge. Exploration is a measure of seeking out new ideas and new people.

A golden mean is the ideal....[traders] with a balance of diversity of ideas in their trading network — engagement and exploration — had returns that were 30 percent ahead of isolated traders and well ahead of the echo chamber traders, too....The new data and measurement tools, he writes, allow for a “God’s eye view” of human activity. And with that knowledge, he adds, comes the potential to engineer better decisions in a “data-driven society.”
Alex_Pentland  books  cross-pollination  curiosity  data_scientists  data_driven  decision_making  massive_data_sets  MIT  Mydata  sensors  social_physics  Steve_Lohr  idea_generation  heterogeneity  ideas  intellectual_diversity  traders  social_data  signals  echo_chambers 
april 2014 by jerryking
When speed is greed - The Globe and Mail
OMAR EL AKKAD

LOS ANGELES — The Globe and Mail

Published Friday, Apr. 11 2014,
Omar_el_Akkad  Michael_Lewis  Wall_Street  traders 
april 2014 by jerryking
Michael Lewis’s Crusade - NYTimes.com
APRIL 4, 2014

Continue reading the main story
[Joe Nocera]

Joe Nocera
Michael_Lewis  Wall_Street  traders 
april 2014 by jerryking
Traders Seek an Edge With High-Tech Snooping - WSJ.com
Dec. 18, 2013 | WSJ | By Michael Rothfeld and Scott Patterson.

A growing industry uses surveillance and data-crunching technology to supply traders with nonpublic information.

Genscape's clients include banks such as Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Deutsche Bank AG, hedge funds including Citadel LLC and large energy-trading outfits such as Trafigura Beheer BV. Surveillance and analysis of the oil, electricity and natural-gas sectors can run Genscape clients more than $300,000 a year.
surveillance  data_driven  slight_edge  traders  hedge_funds  sleuthing  Genscape  sensors  commodities  corporate_espionage  competitive_intelligence  scuttlebutt  due_diligence  market_research  exclusivity  investment_research  research_methods  LBMA  nonpublic  primary_field_research  banks  Citadel  oil_industry  natural_gas  snooping  alternative_data  informational_advantages  imagery  satellites  infrared  electric_power 
december 2013 by jerryking
Incognito
October 2003 | Report on Business Magazine | by Doug Steiner.

"...He always seemed a step ahead, and he did it by working harder, thinking harder and trading harder—and in ways that the competition couldn't quite grasp."

Steiner's 10 rules for making serious money:

1. Economists say investing is a zero-sum game It isn't. Money moves to smart hands quickly, and lazy investors pay a price. Tiger Woods became the been golfer by practising a lot. How many prospectuses have you read in bed after the news?
2. Really good investors rarely crow. If there is $5 to be made from a trade, there will be loss than $2.50 after you've blabbed about how smart you are. There are traders who quietly take home $10 million a year. They live beside you in a modest house and drive a beat-up Nissan.
3. The best follow rules and they‘re patient. They may not invest for months. One great trader I know wanted to buy a house in a fancy neighbourhood. He spent more than a week in the registry office on his vacation, searching the title on each property in the neighbourhood to find what buyers paid and how much of that was mortgaged, going back 20 wars. He got a good deal. He does the same amount of homework investing.
4. Sharp traders never add to losing positions. Too many headaches.
5. Smart investors. when puzzled about when to sell. wonder if they should buy more. If they don’t think they should buy more,they sell.
6. The most information wins. If you like a company, phone some people who work there. Apply for a job. Try their products. Phone the shipping dock to find out if they're busy.
7. Get a Bloomberg terminal. Bloombergs have more information in them than you can use, but smart people use a lot of it.
8. Following really smart traders around the market is hard. Most have more money to invest in a position than the arbitrage or opportunity can handle. They leave few tracks.
9. Great investors an: like great athletes—they see opportunities that others don’t. Often you don't realize that what they've made the most money on is even fungible.
10. If you can't do it yourself, find someone who likes the foldouts in annual reports more than anything. Their management fees are usually worth it. And they usually don't have slick marketing brochures.
absorptive_capacity  arbitrage  Bay_Street  Bloomberg  dedication  Doug_Steiner  hard_work  hedge_funds  humility  idea_generation  investment_advice  investing  investors  money_management  obscurity  opportunities  overlooked_opportunities  patience  perception  primary_field_research  prospectuses  rules_of_the_game  self-discipline  sleuthing  slight_edge  smart_people  traders  training  unfair_advantages  zero-sum_games 
december 2013 by jerryking
Wall Street Avoiding Risk? Ha! Bets Are Getting Bigger
March 12, 2003 | of The Wall Street Journal | By Gregory Zuckerman.

With stocks crumbling this past fall, John Mack, the chief executive officer of Credit Suisse First Boston, met with senior executives of the firm in New York. He surprised them with a suggestion for how to deal with the difficult markets.

"Let's make some bets," he told the executives, according to people at the meeting. "Let's be smart" with the firm's capital, he urged them, but don't be afraid to take some reasonable risks.

When the message circulated within the securities firm, it startled some people, because Credit Suisse Group's CSFB had been sharply cutting back its exposure to trading risks. But now, like most other houses on Wall Street, CSFB is slowly getting back into the business of trading for profit, boosting its exposure at a time when the rest of its businesses are down....For years, Wall Street firms worked to increase less-volatile businesses that don't eat up capital and can provide steady earnings, such as asset management and mergers and acquisitions. But most of those businesses are in a deep slump, while traders betting on "macro" global-economic trends have enjoyed hefty gains thanks to tumbling rates and a falling dollar.

Analysts say that while proprietary trading may be working for now, they question how long the gains can continue. "A lot of the trading models look invincible" for a period of time, but it doesn't always last,
Wall_Street  risk-taking  risks  CSFB  proprietary-trading  traders  big_bets 
december 2013 by jerryking
The J. Aron Takeover of Goldman Sachs - NYTimes.com
October 1, 2012, 12:32 pm3 Comments
The J. Aron Takeover of Goldman Sachs
By SUSANNE CRAIG

Gary D. Cohn, Goldman’s president and chief operating officer, was hired as a metals trader in 1990 and quickly established himself as a go-to guy to fix tricky situations.
Goldman_Sachs  Gary_Cohn  traders 
october 2012 by jerryking
I Think I Can, I Think I Can... - WSJ.com
March 12, 2007 | WSJ | By GEORGE ANDERS.
Successful entrepreneurs believe they can make a lot of money, even when they don't. But can that confidence be taught?

We had one of those prodigies in our high school. Andy was clever, funny -- and constantly in trouble with the principal. His grades were mediocre, but he made a lot of money (and provided jobs for the rest of us) by running a snack bar on site that sold hundreds of candy bars a week.

Within a decade of graduation, Andy was making more than $1 million a year as a commodity trader in Chicago. Ever since, he has been a major player in the capital markets, creating firms and darting into new trading areas. Meanwhile, classmates with much better grades have opted for the safe obscurity of a windowed office inside a major law firm.
confidence  entrepreneurship  inspiration  parenting  traders  commodities  capital_markets  George_Anders 
august 2012 by jerryking
Trader Hits Jackpot in Oil, As Commodity Boom Roars On - WSJ.com
February 28, 2008| WSJ | By ANN DAVIS.
Mr. Hall Bet Early On Market Shift; Buoying Citigroup.

Profiles Andrew J. Hall, an enigmatic British-born trader who, in 2003, anticipated an important shift in the way the world valued oil -- and bet big....Mr. Hall's bet -- that long-term and short-term energy prices would soon abandon their historical relationship with one another -- looked like a long shot when he made it....Around 2003, Mr. Hall became convinced big structural changes were looming in the oil markets. For more than a decade, oil had ranged from $10 to $30 a barrel. But growth in demand was starting to outstrip growth in supply. And the once-sleepy economies of China and India were starting to compete for that fuel.

To place his bet, he focused on what was then a stagnant corner of the commodities world: The extremely long-term market in which traders buy and sell oil to be delivered years in the future.

Futures are contracts to buy or sell a product later on, at a price agreed upon today. Back in 2003, oil for future delivery was considerably cheaper than oil in the "spot," or current, market. For instance, a barrel of oil for delivery in 2005 was as much as 20% cheaper than spot oil....A key to Mr. Hall's success, says a friend, Thomas Coleman, a Louisiana oil-storage executive and fellow art collector, is an ability to block out the noise of the crowd. When Mr. Hall "locks in on an idea, he'll take it to the extreme," Mr. Coleman says.
Citigroup  Phibro  traders  oil_industry  hedge_funds  big_bets  commodities  collectors  pattern_recognition  structural_change  extremities  commodities_supercycle  ratios  noise  turbocharge  extremes 
june 2012 by jerryking
Glencore IPO brings out the rah rah in London traders
May. 18, 2011 | The Globe and Mail | ERIC REGULY.

Glencore is part miner and part trader, making it hard to value.

The mining assets are easy to value. For the public ones, like Xstrata, owner of Canada’s Falconbridge, all you have to do is look at the share price. The value of non-public mining assets can be estimated by attaching a peer-group trading multiple to them.

The trading side is where things get tricky. Trading is a huge business at Glencore, accounting for more than a third of its 2010 earnings before interest, taxes, depreciation and amortization (EBITDA) of $6.2-billion; mining made up the rest.

What valuation to attach to this hybrid beast? That’s hard to say, because no directly comparable company exists. While trading oil, coal, wheat and other commodities can be hugely profitable, it can also be hugely risky. Trading profits, it turns out, can fall just as hard and fast as mining profits, though some investors might think otherwise.
Eric_Reguly  IPOs  Xstrata  Glencore  mining  traders  valuations 
october 2011 by jerryking
WSJ: Galleon and the Trouble With Insider Trading
Jan/Feb 2010 | The Corporate Board | Andy Kessler.

Information now travels at the speed of light. The edge to human traders
is mostly gone, arbitraged out by fast computers.
Near-term blips in stocks will always be driven by those with industry
contacts, legal or illegal. The only way to truly beat the market long
term is to use your head, think out long-term trends, figure out where
productivity and therefore wealth is being created in the economy,
and invest alongside it. This might include investing in wireless commerce, gigabit broadband, personalized prescription drugs, oil shale extraction, or electric smart grids that can better allocate power to where it is needed.
— Andy Kessler,
author.
Andy_Kessler  wealth_creation  productivity  productivity_payoffs  trends  JCK  long-term  strategic_thinking  ideas  arbitrage  traders  beat_the_market  insider_trading  Raj_Rajaratnam  power_grid  alpha  commoditization_of_information  broadband  hydraulic_fracturing  personalization  shale_oil  smart_grid 
june 2011 by jerryking
20 Small Businesses of the Future: Water Trader - BusinessWeek
Water Trader
The Idea: Water becoming scarce

Stage: Bottled water already a billion-dollar business

It has been said that water is the oil of the 21st century. But humans
don't need to drink a liter or two of oil every day. Early signs of
coming conflicts over water are already apparent around the world and in
the U.S., where the Southwest is ever-thirsty. Dickson Despommier, a
professor of microbiology at Columbia University, says water issues are a
coming tidal wave, especially considering the amount of water needed
for agriculture. "People will actually make a choice: I could drink this
water, or I could let my plants drink this water," Despommier says.
"It's going to be the subject of conflicts and wars."
small_business  water  scarcity  commodities  traders 
november 2010 by jerryking
If You Can Bet on the Rain, Watch out for Rainmakers - NYTimes.com
November 5, 2010 | | By STEPHEN J. DUBNER. the Chicago
Mercantile Exchange began selling futures contracts on rain. As this
Marketplace report points out, the Merc — best known for selling
agricultural commodities and futures — “already sells futures for
temperature, frost, snow — even hurricanes.” As the Merc’s Tim
Andriessen told Marketplace, “There’s really no science or art in terms
of long-term forecasts so that uncertainty is actually what makes an
opportunity for products like this.” Andriessen argues that “any
business affected by weather — from farms to concert venues — could find
rain futures beneficial. If that concert is rained out, the
organization running the show could still make money.”

That makes sense, doesn’t it? Most of us buy insurance of one form or
another. And such an offering seems impervious to human intervention.
That’s a key component to setting up a fair betting market: the outcome
can’t be influenced by any of the bettors.
weather  commodities  traders  futures_markets  human_intervention 
november 2010 by jerryking
FT.com / Companies / Financial Services - Louis Dreyfus considers options for reinvention
September 23 2010|FT| By Javier Blas. When Léopold
Louis-Dreyfus, the 18-yr-old son of a farmer from Alsace, started in
1851 buying wheat from local farmers and selling it in a market town, he
could not have dreamed how his grain trading business would grow over
the next 150 years (remaining family-owned and expanding into a
conglomerate including cereals, ships and weapons).Today, Louis Dreyfus
Commodities, still controlled by descendants of Léopold, is one of the
world’s largest agricultural commodities trading houses, rivalling
competitors such as Illinois-based Archer Daniels Midland, New
York-based Bunge and Minneapolis-based Cargill. The four, known because
of their initials as the industry’s “ABCD”, dominate global flows of
agricultural raw materials. The French family-owned group is considering
a radical change of ownership, exploring options, including an initial
public offering or the sale of a stake to long-term investors.
family-owned_businesses  agriculture  commodities  conglomerates  food_crops  Cargill  Louis_Dreyfus  ADM  grains  traders  options  reinvention 
september 2010 by jerryking
Book Review: "For Crying Out Loud" - WSJ.com
NOVEMBER 16, 2009 | Wall Street Journal | By DAVE KANSAS. From
Screams To Screens. 'Open outcry' made the Merc seem magical. But
electronic trading made it ready to compete in global markets.
book_reviews  electronic_trading  commodities  traders  trading_platforms  stockmarkets  bourses 
november 2009 by jerryking
Rajaratnam: Relentless Pursuit of Data - WSJ.com
OCTOBER 24, 2009 | Wall Street Journal | by GREGORY ZUCKERMAN
and ROBERT A. GUTH. The power of the "edge," as Mr. Rajaratnam called
it, also was reflected in how Galleon was organized. At most hedge
funds, traders are supposed to simply execute a firm's trades, which are
dictated by analysts and portfolio managers. Galleon had a different
approach: putting traders in charge of their own capital. A trader who
showed promise would sometimes be given $25 million to $50 million to
invest in a semi-autonomous fashion. To be sure, gathering information
is the lifeblood of most hedge funds. But when it is material, nonpublic
information about a company, it can expose a trader to accusations of
insider trading.
insider_information  Wall_Street  insider_trading  information_flows  private_information  hedge_funds  Raj_Rajaratnam  slight_edge  nonpublic  traders 
october 2009 by jerryking
FT.com / Home UK / UK - Traders seek a fresh well in world of commodities
July 24, 2008, Financial Times pg. 25 article by Sarah O'Connor.
(1) Sextant Capital Management
(2) Global Water Intelligence
(3) Waterfind
(4) World Resources Institute
(5) Water Aid
water  commodities  hedge_funds  traders 
march 2009 by jerryking
Information Wants to Be Expensive - WSJ.com
FEBRUARY 23, 2009 WSJ op-ed by L. GORDON CROVITZ arguing that newspapers need to act like they're worth something.


Time magazine published a cover story earlier this month headlined "How to Save Your Newspaper." In it, former Time Managing Editor Walter Isaacson noted how odd it is to charge for subscriptions in print but not online. "Even an old print junkie like me has quit subscribing to the New York Times, because if it doesn't see fit to charge me for its content, I'd feel like a fool paying for it. This is not a business model that makes sense."......People are happy to pay for news and information however it's delivered, but only if it has real, differentiated value. Traders must have their Bloomberg or Thomson Reuters terminal. Lawyers wouldn't go to court without accessing the Lexis or West online service..........By 2007, the Journal's Web site had reached one million paying subscribers who value full access and convenient navigation to its unique business news. Another 20 million people each month read Journal articles made available free. Likewise, the Financial Times and ESPN generate significant online revenues from subscribers, along with free content. So do consumer services such as Consumer Reports and Zagat. Steve Jobs proved we'll pay up to $1 for digital songs on iTunes, and Amazon's Kindle established $10 as reasonable for a digital book. .........For years, publishers and editors have asked the wrong question: Will people pay to access my newspaper content on the Web? The right question is: What kind of journalism can my staff produce that is different and valuable enough that people will pay for it online?..........newspaper journalists still report the key local news. American Lawyer founder Steven Brill argues that "local newspapers are the best brands, and people will pay a small amount to get information -- whether it be a zoning board or a Little League game -- that they can't get anywhere else." A few local newspapers, such as the Arkansas Democrat-Gazette and Hong Kong's South China Morning Post, charge for access online, knowing their news can't be found elsewhere...........When author Stewart Brand coined the expression "Information wants to be free," he focused on how technology makes it cheap and easy to communicate and share knowledge. But the rest of his quote is rarely noticed.

This says, "Information also wants to be expensive." The right information in today's complex economy and society can make a huge difference in our professional and personal lives. Not having this information can also make a big difference, especially if someone else does have it. And for valuable information, online is a great new way for it to be valued.
asking_the_right_questions  Bloomberg  brands  differentiation  digital_media  information  iTunes  journalism  L._Gordon_Crovtiz  Lexis  local_journalism  newspapers  op_ed  questions  Steve_Jobs  Steven_Brill  Stewart_Brand  subscriptions  Thomson_Reuters  TIME_Inc.  traders  Walter_Isaacson 
february 2009 by jerryking

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