5 ms·

I find the market for knowledge which others do not have but which aren't actually illegal to be quite fascinating. There is a company who will break down a br

I find the market for knowledge which others do not have but which aren't actually illegal to be quite fascinating. There is a company who will break down a brand new car into its component parts and by knowledge of materials and production processes can tell to a very narrow margin what the cost of producing that car is - and therefore the profit potential of each sale. The information about the number of cars sold is either public or more easily obtained than the actual company accounts (public in many jurisdictions due to car registrations). There are other companies who will buy a bunch of iPhones for example and by carefully analysing the serial numbers can deduce to within a reasonable margin exactly how many have been sold. Using information like this I'm sure most large trading firms have very good models of the likely performance of each publicly listed company. I wonder how far down this rabbit hole things go. Do they have people standing outside factories counting how many cars leave on the back of the truck? Do they have access to systems like Galileo in the travel industry where they could figure out how many seats had been booked on a plane, or how many rooms were booked in a hotel? They can then take a good guess at staffing / fixed costs and arrive very much in the correct ball park.

dzdt 8y ago
Satellite imagery counting the cars, not people. [1] http://www.otusintel.com/insights/hedge-funds-gaining-trading-edge-through-satellite-imagery/ http://www.otusintel.com/insights/hedge-funds-gaining-tradin...
laurentl 8y ago
> There are other companies who will buy a bunch of iPhones for example and by carefully analysing the serial numbers can deduce to within a reasonable margin exactly how many have been sold. AKA the German Tank Problem (https://en.wikipedia.org/wiki/German_tank_problem https://en.wikipedia.org/wiki/German_tank_problem). Fascinating application of statistics.
- mamon 8y ago
  Except it only works when serial numbers are sequential, I believe the common practice today is to have serial numbers to be random alphanumeric strings.
  - noir_lord 8y ago
    Bought 3 identical Sony cameras recently 1 a month ago and a pair this week, serial numbers are numerical and the most recent pair are two digits apart. So not everyone randomises.
  - washadjeffmad 8y ago
    Not usually, and especially not for physical products. An 8 digit alphanumeric serial contains 2.82E13 possible values (which is more than any one company will sell of anything, ever), and it'd be crazy not to use that to store some kind of information like models, series, bins, etc. Two characters allow almost 1300 possibilities, and just three give over 46,000. Our POs have 6 digits, and after over two decades of multiple weekly deliveries, we're still in the 500000s. To make that random would be a huge waste and also destroy the potential for creating visible patterns helpful within a lot of industries. Edit: I just thought about redemption codes, which yes, do aim to be randomized have a huge space relative to the issued codes. In those cases, I see what you mean. Serials of digital media are often and intentionally randomized.
ajay-d 8y ago
How about tracking corporate jets to buy stock in companies before a merger / acquisition. That blew me away when I first read about it. [0] https://www.bloomberg.com/news/articles/2017-01-27/hedge-funds-track-j-j-private-jet-for-an-edge-on-actelion-score https://www.bloomberg.com/news/articles/2017-01-27/hedge-fun...
- xefer 8y ago
  In the movie "Wall Street" (1987) Gordon Gecko has his lackey Bud Fox follow a rival around to try and figure out what he's going to invest in, so they can undercut him. He follows him to a private jet and finds out it's flying to mid-sized city that happens to be the corporate headquarters of a particular company. In the movie it's sort of implied that this activity is illegal. I wonder if it actually was, and if so, why that would be different than what those hedge fund guys you reference were doing?
lovich 8y ago
A company I interviewed at was finding people who lived near power plants and paying them to set up cameras. The cameras would look at the smoke/steam coming out of the plant and based on that and the type and age of the plant they were estimating the power being generated. They'd then sell that data to energy traders.
parkaboy 8y ago
>> Do they have people standing outside factories counting how many cars leave on the back of the truck? Yes. They do. I took a car ride with someone a few years ago who claimed to work for a consulting firm that the big banks+others hire to gather on the ground intel from companies through things like factory tours and shooting the sh*t with employees at bars near the warehouses etc.
- tomp 8y ago
  The problem with that is that it could be insider information (or, at least, it isn't obviously not insider information, the way info about the serial numbers from iPhones that anyone could buy is public information).
  - froindt 8y ago
    The gist I've read in the past is that basically as long as it's not obtained illegally (e.g. breaking in and stealing) and there's no benefit to the person providing the information, it's not insider trading. Matt Levine writes on the topic pretty regularly. Here's an example with a number of interesting situations. www.businesslive.co.za/amp/rdm/business/2018-02-01-matt-levine-the-fine-line-between-insider-trading-and-knowing-more-than-others/
    - Y_Y 8y ago
      That would be a good way to donate to charity. Just feed info about your corporate overlord to a philanthropic trader.
      - froindt 8y ago
        I've never thought about that before, but it would certainly make for an interesting news story! "Meals on Wheels is accused of receiving insider information about big market movements from dozens of investment bankers. The Meals on Wheels endowment has seen 10x growth in the past 18 months. It looks like the group they provide for will be fed forever, even if we went through another Great Depression-level financial catastrophe. Should they be allowed to keep these funds? It certainly looks bad for the government to fine them hundreds of millions of dollars with the recent cuts in government-provided social programs."
froindt 8y ago
>I wonder how far down this rabbit hole things go. Do they have people standing outside factories counting how many cars leave on the back of the truck? Do they have people standing outside factories counting how many cars leave on the back of the truck? Mostly as an exercise for myself, I've been curious to make a system that would do this. Cameras on all the entrances, license plate tracking, and maintaining an "inventory" of vehicles in the facility. You could track shift change, number of consumer vehicles (estimating number of people working), number of semis, etc. Throw things into mechanical turk and you could categorize semis. Maybe that factory that makes big things needs one big component for every unit, and it's super obvious when it comes in on a semi. Boom, that's going to be a strongly correlated factor to production. Consumer vehicles versus true production over time could help find increases in efficiency. There are tons of ways to leverage little bits of data, and I think a vehicle in/out tracker would get you a LOT of information.
- VBprogrammer 8y ago
  Funny enough, in the last couple of days I've been wondering whether you could use computer vision in combination with sports betting to generate more accurate odds given the current state of the game. Of course the problem with that is getting up to the second video feeds (as apposed to delayed video feeds from SKY etc) from a fixed view point. I'm sure you could pay some money to get essentially a security camera feed at the game but that would be expensive. Which made me wonder whether someone could turn up the night before a big game, park a drone on the roof broadcasting the video to a van with the computers processing the results while evading detection...
  - froindt 8y ago
    >I've been wondering whether you could use computer vision in combination with sports betting to generate more accurate odds given the current state of the game. Totally unfamiliar with the gambling side of things. Do they set odds at the start of the game and maintain them throughout? There are already companies who will do live "coding" of game events to create a stream of data about the game. Players on the field, time on the field, location of the ball, location of the players, who has possession, possession by player. There are some other trackers out there targeted for coaches. E.g. track player running speed. If they are going 10% slower than typical after the start of a play in American football, it's a good sign that they need to come out. The common problem with your idea and mine are getting high enough quality for relatively modest prices. A standard dash cam isn't enough to grab a license plate, it'd have to be at least somewhat better tuned. Drone video from a distance is going to be tough to use to discern who is who and to get valuable info.
xivzgrev 8y ago
I haven't seen this far, but one summer I joined a friend working for a commodity trading firm. We went into corn fields, ripped off a couple ears and made some counts to help them estimate yield. it was definitely trespassing, one time he got caught and got an "earful" from the farmer.
deleted 8y ago
[deleted]

dzdt 8y ago

Satellite imagery counting the cars, not people. [1] http://www.otusintel.com/insights/hedge-funds-gaining-trading-edge-through-satellite-imagery/ http://www.otusintel.com/insights/hedge-funds-gaining-tradin...

laurentl 8y ago

> There are other companies who will buy a bunch of iPhones for example and by carefully analysing the serial numbers can deduce to within a reasonable margin exactly how many have been sold. AKA the German Tank Problem (https://en.wikipedia.org/wiki/German_tank_problem https://en.wikipedia.org/wiki/German_tank_problem). Fascinating application of statistics.

mamon 8y ago
Except it only works when serial numbers are sequential, I believe the common practice today is to have serial numbers to be random alphanumeric strings.
- noir_lord 8y ago
  Bought 3 identical Sony cameras recently 1 a month ago and a pair this week, serial numbers are numerical and the most recent pair are two digits apart. So not everyone randomises.
- washadjeffmad 8y ago
  Not usually, and especially not for physical products. An 8 digit alphanumeric serial contains 2.82E13 possible values (which is more than any one company will sell of anything, ever), and it'd be crazy not to use that to store some kind of information like models, series, bins, etc. Two characters allow almost 1300 possibilities, and just three give over 46,000. Our POs have 6 digits, and after over two decades of multiple weekly deliveries, we're still in the 500000s. To make that random would be a huge waste and also destroy the potential for creating visible patterns helpful within a lot of industries. Edit: I just thought about redemption codes, which yes, do aim to be randomized have a huge space relative to the issued codes. In those cases, I see what you mean. Serials of digital media are often and intentionally randomized.

ajay-d 8y ago

How about tracking corporate jets to buy stock in companies before a merger / acquisition. That blew me away when I first read about it. [0] https://www.bloomberg.com/news/articles/2017-01-27/hedge-funds-track-j-j-private-jet-for-an-edge-on-actelion-score https://www.bloomberg.com/news/articles/2017-01-27/hedge-fun...

xefer 8y ago
In the movie "Wall Street" (1987) Gordon Gecko has his lackey Bud Fox follow a rival around to try and figure out what he's going to invest in, so they can undercut him. He follows him to a private jet and finds out it's flying to mid-sized city that happens to be the corporate headquarters of a particular company. In the movie it's sort of implied that this activity is illegal. I wonder if it actually was, and if so, why that would be different than what those hedge fund guys you reference were doing?

lovich 8y ago

A company I interviewed at was finding people who lived near power plants and paying them to set up cameras. The cameras would look at the smoke/steam coming out of the plant and based on that and the type and age of the plant they were estimating the power being generated. They'd then sell that data to energy traders.

parkaboy 8y ago

>> Do they have people standing outside factories counting how many cars leave on the back of the truck? Yes. They do. I took a car ride with someone a few years ago who claimed to work for a consulting firm that the big banks+others hire to gather on the ground intel from companies through things like factory tours and shooting the sh*t with employees at bars near the warehouses etc.

tomp 8y ago
The problem with that is that it could be insider information (or, at least, it isn't obviously not insider information, the way info about the serial numbers from iPhones that anyone could buy is public information).
- froindt 8y ago
  The gist I've read in the past is that basically as long as it's not obtained illegally (e.g. breaking in and stealing) and there's no benefit to the person providing the information, it's not insider trading. Matt Levine writes on the topic pretty regularly. Here's an example with a number of interesting situations. www.businesslive.co.za/amp/rdm/business/2018-02-01-matt-levine-the-fine-line-between-insider-trading-and-knowing-more-than-others/
  - Y_Y 8y ago
    That would be a good way to donate to charity. Just feed info about your corporate overlord to a philanthropic trader.
    - froindt 8y ago
      I've never thought about that before, but it would certainly make for an interesting news story! "Meals on Wheels is accused of receiving insider information about big market movements from dozens of investment bankers. The Meals on Wheels endowment has seen 10x growth in the past 18 months. It looks like the group they provide for will be fed forever, even if we went through another Great Depression-level financial catastrophe. Should they be allowed to keep these funds? It certainly looks bad for the government to fine them hundreds of millions of dollars with the recent cuts in government-provided social programs."

froindt 8y ago

>I wonder how far down this rabbit hole things go. Do they have people standing outside factories counting how many cars leave on the back of the truck? Do they have people standing outside factories counting how many cars leave on the back of the truck? Mostly as an exercise for myself, I've been curious to make a system that would do this. Cameras on all the entrances, license plate tracking, and maintaining an "inventory" of vehicles in the facility. You could track shift change, number of consumer vehicles (estimating number of people working), number of semis, etc. Throw things into mechanical turk and you could categorize semis. Maybe that factory that makes big things needs one big component for every unit, and it's super obvious when it comes in on a semi. Boom, that's going to be a strongly correlated factor to production. Consumer vehicles versus true production over time could help find increases in efficiency. There are tons of ways to leverage little bits of data, and I think a vehicle in/out tracker would get you a LOT of information.

VBprogrammer 8y ago
Funny enough, in the last couple of days I've been wondering whether you could use computer vision in combination with sports betting to generate more accurate odds given the current state of the game. Of course the problem with that is getting up to the second video feeds (as apposed to delayed video feeds from SKY etc) from a fixed view point. I'm sure you could pay some money to get essentially a security camera feed at the game but that would be expensive. Which made me wonder whether someone could turn up the night before a big game, park a drone on the roof broadcasting the video to a van with the computers processing the results while evading detection...
- froindt 8y ago
  >I've been wondering whether you could use computer vision in combination with sports betting to generate more accurate odds given the current state of the game. Totally unfamiliar with the gambling side of things. Do they set odds at the start of the game and maintain them throughout? There are already companies who will do live "coding" of game events to create a stream of data about the game. Players on the field, time on the field, location of the ball, location of the players, who has possession, possession by player. There are some other trackers out there targeted for coaches. E.g. track player running speed. If they are going 10% slower than typical after the start of a play in American football, it's a good sign that they need to come out. The common problem with your idea and mine are getting high enough quality for relatively modest prices. A standard dash cam isn't enough to grab a license plate, it'd have to be at least somewhat better tuned. Drone video from a distance is going to be tough to use to discern who is who and to get valuable info.

xivzgrev 8y ago

I haven't seen this far, but one summer I joined a friend working for a commodity trading firm. We went into corn fields, ripped off a couple ears and made some counts to help them estimate yield. it was definitely trespassing, one time he got caught and got an "earful" from the farmer.

deleted 8y ago

[deleted]