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Few years back, SEC started being very agressive about finding entities making above average returns; my understanding is that if over a set amount of transacti

by nxzero 10y ago

Few years back, SEC started being very agressive about finding entities making above average returns; my understanding is that if over a set amount of transactions you're making over 30% that you will get "knocked" and the auditors have zero reason not to leak the information. Best example I know is the Walmart parking lot satellite imagery analysis; happy to dig up a link.

Bromskloss 10y ago
I'd love a link as well as additional examples, if you can think of any.
- partisan 10y ago
  Googling "walmart parking lot analysis" yielded the following as the first result. http://www.cnbc.com/id/38722872 http://www.cnbc.com/id/38722872
  - Bromskloss 10y ago
    Thanks. It has no information about the technique being leaked by the SEC, though.
    - eggy 10y ago
      Not sure about SEC leaking anything, but satellite data is a tool for investors to use satellite imagery, and image processing to see things like how many cars are in several big branches, make assumptions and correlations to spending, and then act on the information before Walmart releases a quarterly statement, sort of. Number of container ships docked or leaving port around China can forecast trends in China's exports, again before any official numbers are made available. I don't see this as insider trading. You pay for the satellite time, you gamble on your data analysis, and you either win or lose. If it were certain, others do the same, and the edge is lost quickly by market adjustments.
lordnacho 10y ago
That sounds like weeding out insider trading, not finding people with legitimate market beating strategies. If you're trading on confidential information, your profile will look very interesting indeed. You'll be trading near announcements, and you'll be right all the time. Your turnover vs profit and number of trades will be through the roof. By contrast quant shops with real models will be using the law of large numbers.

by nxzero 10y ago

Bromskloss 10y ago

I'd love a link as well as additional examples, if you can think of any.

partisan 10y ago
Googling "walmart parking lot analysis" yielded the following as the first result. http://www.cnbc.com/id/38722872 http://www.cnbc.com/id/38722872
- Bromskloss 10y ago
  Thanks. It has no information about the technique being leaked by the SEC, though.
  - eggy 10y ago
    Not sure about SEC leaking anything, but satellite data is a tool for investors to use satellite imagery, and image processing to see things like how many cars are in several big branches, make assumptions and correlations to spending, and then act on the information before Walmart releases a quarterly statement, sort of. Number of container ships docked or leaving port around China can forecast trends in China's exports, again before any official numbers are made available. I don't see this as insider trading. You pay for the satellite time, you gamble on your data analysis, and you either win or lose. If it were certain, others do the same, and the edge is lost quickly by market adjustments.

lordnacho 10y ago

That sounds like weeding out insider trading, not finding people with legitimate market beating strategies. If you're trading on confidential information, your profile will look very interesting indeed. You'll be trading near announcements, and you'll be right all the time. Your turnover vs profit and number of trades will be through the roof. By contrast quant shops with real models will be using the law of large numbers.