Big Data in Investing: Point72 Asset Management President Doug Haynes discusses the role of big data in the investment process. Source: Wall Street Week, Episode 27, October 25, 2015.
Wall Street Week Episode 27 features Point72 (formerly SAC Capital) President Doug Haynes with Neuberger Berman Managing Director Holly Newman Kroft and Crispin Capital Founder Michael Cahill. Published on Oct 25, 2015.
Episode Feature: The role of Big Data in the investment process | Wall Street Week:
- "Big data has largely become a marketing buzz word for tech companies, but generally the term describes the capture and analysis of large sets of information. Technology has not only increased the amount of data available for consumption, but also improved our ability to store and distill it."
- "Traditional investment managers have relied on quarterly earnings reports to analyze business trends, analysts now have avenues to process information on a more granular level. One example Haynes highlighted is the ability to look at real-time flow of transactional data from retailers rather than relying on infrequently reported metrics. This type of information can give the manager valuable insights into not only transaction volume, but also things like where and when sales take place and the demographics of purchasers."
- "Twitter, because of its concise and rudimentary nature, has also become a popular spigot of data into which financial engineers plug for sentiment-related insights. In fact, this week a company called Markit Prophet revealed it is in discussions to create an ETF that holds the 25 most-tweeted-about stocks, reconstituted quarterly but rebalanced daily."
- "An even more progressive use of big data has is what Haynes calls anticipatory insight. The more Wall Street firms invest in big data analytics, the more efficiently the market prices reflect those inputs. The Holy Grail in terms of generating alpha is being a step ahead of the market."