Nowcasting
Leverage data to capture a better perspective of reality.
Be process-driven, targeted and differentiated in your research while embracing intellectual honesty and curiosity. Mastering the intersection of multiple disciplines and filtering signal from noise is key to generating unique, high-conviction insights.
Systems
- Source data directly from online retailers across various geographies to track prices in near real-time, ahead of official inflation prints.
- Monitor daily electricity consumption as a gauge of real-time economic activity. Spikes in electricity usage can indicate something is happening in the economy even if the narrative suggests otherwise.
- Develop automated nowcasting tools to track as many relevant time series as possible in real time, to pinpoint anomalies and strange moves in markets as they happen.
Discipline
- Admit when you are wrong to maintain transparency and trust with your customers / community.
- Focus research on areas outside the US, such as Europe, China, Japan, to find tradable trends that are less-covered.
- Develop a structured research process, but be willing to explore new topics by regularly meeting with experts outside your domain.
- Keep a running list of research ideas and observations, connecting dots to generate insights. Writing is a powerful tool to structure thinking.
- Simplify the expression of big macro views into single, high conviction trades rather than trading everything.
- Read widely outside of finance, in areas like technology, science, history, to draw insights and develop a latticework of mental models.
- Maintain a carefully curated Twitter feed to track sentiment, narratives and potential gaps in your own views.
- Ruthlessly prioritize what data, assets and markets to monitor - only follow what you intend to trade based on your research process and edge.