by Tyler Durden
Thu, 11/15/2018 - 21:45
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As the financial research industry drifts further away from being 100% human powered to relying upon split second decision-making based on data collected by a human/machine hybrids, Bank of America is seeking to lap the competition. The bank's head of global research, Candace Browning, has put together a squad of six people, including four PhDs that are going to team up with about 600 Wall Street analysts. According to Bloomberg, the goal of this group is to streamline quantitative analysis: spotting patterns in data sets before anybody else.
Of course, in order to find these patterns, analysts have to sift through enormous quantities of data, pulled from what are usually non-traditional sources - and haven't been spotted by others - in order to help forecast things like airline revenue, luxury spending and even the timing of the business cycle. Bank of America clients seem to like this type of analysis: these quant-enhanced reports get about three times more clicks than other publications that the bank delivers to its clients.
Browning explained BofA's quantamental approach to Bloomberg as follows: "It’s telling clients something they don’t already know. The future of Wall Street, the future of investing, is going to be aggregating and analyzing data in ways that give you a cutting edge on new information. Once you’ve done that, you still need the human factor."
The rise of quantitative analysis shouldn’t be much of a surprise given the fact that trading is moving more towards algorithms and high frequency electronic training. With quicker trading times comes the need for analyzing larger sets of data faster, which could be a laborious task. In fact, one can argue that robots are now writing research meant to be read by other robots - it's probably only a matter of time before it is written in binary.
All this takes place as banks are trying to keep up with the breakneck pace of evlution in the industry. In fact, other banks already have a head start: UBS Group’s "Evidence Lab" looks over billions of data points in order to analyze stocks while State Street distributes data on inflation that is based off of more than 5 million item prices sold around the world. Maybe the Fed could use some of these approaches to actually calculate what the real CPI is...
http://www.zerohedge.com/news/2018-11-14/bank-america-leading-new-quant-research-arms-race?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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