Alternative Data Weekly Newsletter Archives

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A curated digest of must-read news from around the internet about alternative data. Join the buy-side professionals already reading the Alternative Data Weekly.

November 2016

eBay Looks to Outperform in Q4

Quandl

In this report from Quandl’s “Alternative Data In Action” series we present an analysis of eBay’s Gross Merchandise Volume (GMV) inferred from 3 million opted-in email users. By aggregating the dollar totals of email receipts from eBay and StubHub, we can construct an index that is a proxy for eBay’s US GMV. From there, we discovered the GMV drivers and quality. All in all, eBay looks to slightly outperform this quarter. Read More

Inside a Moneymaking Machine Like No Other

Bloomberg Markets

Why are they keeping all the money for themselves? Renaissance’s best performing fund is available to employees only – as long as they are willing to pay 5 and 44. This is a fascinating biopic about a top hedge fund that does things a little differently: they look for weak signals, they employ dueling string theory twins, and their website hasn’t been updated since 1993. Read More

Renaissance’s Skill

Bloomberg View

Bloomberg’s Matt Levine follows up with his thoughts on the Renaissance coverage. His takeaway is not the dueling string theory twins, but rather: Renaissance doesn’t look for signals that make sense. Instead, they look for signals that don’t make much sense, that are weak. Then they call in the machines. Read More

Big Data Is a Big Mess for Hedge Funds Hunting Signals

Bloomberg

The data created by humans through their everyday use of technology is “low-grade,” and quantity does not equal quality. But the signals are hidden among the noise, and in order to make sense of it, Matei Zatreanu believes hedge funds will have to make many substantial changes to running their businesses. Too many are just “checking the box” on data-driven investing. Read More

Beware of Data Mining

Bloomberg View

A warning from Bloomberg’s Barry Ritholtz: data mining does not predict anything and shouldn’t be relied upon to make forecasts. This article is a short but thoughtful look at approaches to data and testing, and a reminder that “investing after the fact is easy.” Read More

Unstructured Data Sources for New Opportunities

Nanalyze

Take a look at how three companies are transforming unstructured data into something clean and actionable. Parrot Analytics, used by the BBC, generates a “demand rating” for TV programs. Digital Globe takes pictures of the earth. City Bldr uses algorithms to rank property sites for their redevelopment potential. More

How to Disappear in a Fog of Data (and Why)

Motherboard

We all know we’re being tracked, but beyond targeted advertising, it is difficult to understand to what extent. Motherboard reviews a book that teaches us – in depth – how to obfuscate ourselves from the algorightms catching the hail of bits we produce. It’s another reminder to those of us using data to make predictions that we must be mindful of its reliability. Read More

The Plural of ‘Anecdote’ is not ‘Data’

CONVERSABLE ECONOMIST

A satellite photo of North and South Korea at night makes it appear as if North Korea does not exist. There are rumblings that satellite data is not holding up to its potential as a source of alpha, but economists are getting a lot of value from it in the form of macroeconomic indicators, especially in countries where government data is not reliable. Read More

a16z Gets in the Game

Business Wire

Quantopian announced its series C raise of $25 million, led by Andreessen Horowitz, bringing its total capital raised to almost $50 million. The round includes additional investment from Bessemer Venture Partners, Steve Cohen’s Point72 Ventures, Khosla Ventures, and Spark Capital. It’s another vote of confidence for the crowd-sourced quant model. Read More

Foursquare Flexes Muscles with Snapchat Deal

Fast Company

Snapchat will now be able to tap into Foursquare’s treasure trove of 87 million places, thanks to a deal inked by the two companies this week. Benefits to Snapchat include more accurate mapping data to sell location-based advertisements. Foursquare gets to “continue to flex its muscle as a powerhouse for location intelligence.” Read More

The Bifurcation of Hedge Funds

The New York Times

The New York Times claims that “the future star of the hedge fund industry is not the next William A. Ackman, Carl C. Icahn or George Soros. Rather, it is a computer…” How much of this is hyperbole? More on the man vs. machine debate, with no clear winner, and perhaps even some backlash. Read More

What Quantitative Investors Can Learn From the Election

Dealbreaker

There has never been a president like Donald Trump.Therefore all of the methods we have of predicting how his actions will impact markets are probably wrong. Dealing with this ‘regime change’ will require that we embrace synthetic modeling, which paints the Trump presidency as an amalgam of different factors and then allows us to isolate each of those factors for analysis. Read More

Alternative Data Finds New Audience

Markets Media

Proving that we are truly in ‘the epoch of a nanosecond’: alternative data has already moved beyond the realm of quants to broader audiences, including long-only firms and traditional asset managers. We wonder when it will no longer be considered alternative. Tomorrow? Read More

Six Degrees of Quant: Kevin Bacon and the Erdos Number Mystery

Bloomberg Quint

Your Erdos number could soon end up on your resume. Like Six Degrees of Kevin Bacon, your Erdos number is measured by your distance, in people, to Paul Erdos through collaboration. Part inside baseball, part inside joke, the Erdos number nonetheless seems to have clout among the mathematically-minded. Read More

Save The Date – Quandl is Hosting an Alternative Data Conference

Quandl

Quandl will host the inaugural Alternative Data Conference in New York City on January 17, 2017. In an action-packed half day we’ll explore alternative data as the next source of alpha for quantitative investing, and share never-before-seen data from business operations, agriculture, insurance policies and more. Read More

Alternative Data Spend in U.S. to Double in Next Five Years

Yahoo Finance

TABB Group has published what is likely the first analyst report on the future of alternative data, and estimates that spend on non-traditional data sets will double to $400 million in the next five years. While the full report is available only to TABB clients, its mere existence indicates growing interest in the field. Read More

Glassdoor Data Now an Input to U.S. Earnings

The Wall Street Journal

Job review company Glassdoor recently unveiled Local Pay Reports, a data product that provides real-time insights into wage trends in local markets around the U.S. As a corollary to government data, this could give investors more accurate eyes on company performance. But it comes at a price, and with a caution flag: how much do you trust the source? Read More

Quantamental Fundamentalism and the Donut Factory

Traders Magazine

Quantitative + Fundamental = Quantamental, says this piece, and argues that fundamental strategies will never go away. They will simply be augmented by quantitative research. Old story, new analogy: a donut. We’re not convinced on the analogy, but the article is worth a read. Read More

How Email Receipts Predicted GoPro’s Q3 Earnings

Quandl Blog

Using our own Email Receipt database to analyze the quarter leading up to GoPro’s disappointing earnings generated some surprising insights, including distinct weakness in the Amazon channel. These insights hinted at a less rosy picture than the one painted by the analyst community. Read More

Julia’s Growing Up: Time to Take a Look

Waters Technology

Julia is 20 times faster than Python, 100 times faster than R, and 93 times faster than Matlab. Just ask the Fed. It therefore eliminates the need to translate algorithms into C++ to make them run faster. Still a “young” language by programmers’ standards, Julia is gaining traction in capital markets. Once again, it’s not just about data; it’s about data and speed. More

U.S. ISPs Will Soon Need Your Permission to Sell Your Data

Lexology

From the annals of the privacy debate: the FCC just voted 3-2 to stop ISPs from sharing your personal data with third parties, like location data or browsing history, without your consent. The immediate effects to capital markets seem nominal, but downstream we wonder about the impact of this ruling. More

Do Sensor Trackers Make Us Better Liars?

SilliconANGLE

Data and truth are two different things. In today’s connected, sensor-laden world, this is easy to forget. As businesses use unprecedented volumes of data generated by consumers, this piece asks: “Is it to consumers’ benefit to attempt gaming the system, or even avoiding the system altogether? Is the business world’s quest for truth merely encouraging consumers to get better at lying?” Read More

Day Traders Confuse Retiring Baseball Player for Bank of Japan’s Governor

Bloomberg

Proof that machines (and people) still have trouble with semantics: the Japanese Yen almost suffered serious damage when a tweet about a retiring baseball player was misinterpreted because of its source. Read More

Blackrock Builds Robots

Institutional Investor

It’s amazing how much news we find about the most powerful investors ramping up their investments in data. Last week it was Tudor; this week it’s BlackRock. In fact, the company’s 1500 strong Aladdin product group sounds suspiciously like a giant laboratory building nothing short of robots to make trading decisions. And it’s all in support of the oft-repeated adage: “We want to find the data sources that are not well known but are in fact predictive of future returns… Read More

Big Data and Expected Returns

BloombergView

It’s a question we’ve asked ourselves in the past – what is the link between alternative data and insider trading? Matt Levine ponders the evolving definition of “material” information in his latest column, and gets us thinking about the “fairness” factor of alternative data. Read More

An Army of Human Data Collectors Emerges

Institutional Investor

“Nadir Khan hopes to help hedge funds and other organizations produce alpha by harnessing the power of data.” Hm. Where have we heard that before? A former SAC trader, Khan is building a data company dedicated to producing data and insights intended for fundamental stock pickers. His method? An army of human data collectors based in Karachi, where labor is cheap, who call stores around the world to pick up meaningful cues. When will they be replaced by drones? That is the question. Read More

Goldman Sachs Says They’re Still Using Sentiment Data

Business Insider

While many believe that sentiment data has lost its edge, Goldman Sachs says it’s a quant strategy they favor. As they see it, there are corners of the market that continue to be heavily informed by sentiment data and that’s not going to change anytime soon. This is either fodder for an evolving debate, or a giant red herring. We’re not sure which. Read More

Free Satellite Data Abounds

Science Business

The European Commission is calling on the private sector to dig into its vast trove of earth observation data, but few are listening. The data is free and readily available, and while the public sector is taking advantage, the private sector seems to be staying away. Why? Perhaps 5m resolution and 6-day refresh rate have something to do with it. But the Commission thinks we’re just not thinking hard enough. Read More

From Onsite Storage, to Cloud, and Back to Onsite Storage Again

eWeek

For those who still aren’t convinced that the cloud is secure: Cisco seems to be listening. The company is releasing a storage-optimized system that can house massive amounts of data and function as an alternative to the public cloud. It also takes up less space, uses less power and less cabling than traditional hardware. And, apparently it’s cheaper than cloud-based storage. We wonder: what’s the catch? Read More

4 Great Infographics Produced from Data Exhaust

Barrachd Blog

Alternative data for purposes outside of investing can still offer insights. 45 years of Man Booker Prize data points made it easy to predict this year’s winner: be a man in your fifties from England writing about a man set in England in the present day. A unique look at exhaust data visualized in multiple infographics from the folks at Barrachd. Read More

More on China’s GDP Statistics

The Market Mogul

As China reports a growth rate of 6.7%, economists and analysts alike continue to be suspicious. This article claims that crowd-sourced sentiment data balances out the uncanny results. We’re obsessed with China’s secrets and convinced we can solve them with alternative data. But maybe all that effort doesn’t produce a different result. Read More

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