4 ms·

Hedge funds have been using location data to ‘predict’ corporate earnings for at least 5 years, that I know of. There’s also speculation that they use the data

by afpx 8y ago

Hedge funds have been using location data to ‘predict’ corporate earnings for at least 5 years, that I know of. There’s also speculation that they use the data to identify locations of VIPs and where they’re going (by clustering activities of the VIP’s entourage). It’s unfortunate that news organizations as reputable and prominent as the NYT only get on these stories so late in the game. This information would have been more useful to the public back in 2013. What I don’t understand is why these types of activities by hedge funds aren’t considered insider trading.

kasey_junk 8y ago
Because the hedge funds are by definition not insiders? They are literally not using non-public corporate data at all. Insider trading laws don’t exist to make sure there isn’t information assymetry, the market is all about that assymetry. Insider trading laws are about insiders stealing from other shareholders.
- afpx 8y ago
  Well, it is non-public data. I once spoke with a lawyer to see if I could legally use location data to do the same thing (for instance, it’s easy to correlate changes in activity at certain retailers with quarterly earnings), and I was told it’s risky.
  - mentat 8y ago
    It is not true in the United States, other countries differ: https://www.bloomberg.com/opinion/articles/2018-12-03/insider-trading-in-the-potato-trade https://www.bloomberg.com/opinion/articles/2018-12-03/inside...
  - froindt 8y ago
    Non-public and insider are two different concepts. I could send a satellite to space, take pictures of parking lots, count cars, and it'd be a pretty decent indicator to the relative success of a retailer. Add some other signals into the model and it'd probably be good. I don't need to give the public access to my satellite images. But if I wanted to make a subscription service for 100k/month, I could. It would be non-public, but not insider.
    - kasey_junk 8y ago
      https://www.google.com/amp/s/www.thestreet.com/amp/story/13680468/1/orbital-insight-uses-satellite-images-to-give-hedge-funds-trading-tips.html https://www.google.com/amp/s/www.thestreet.com/amp/story/136...
  - jonknee 8y ago
    That's not risky, it's done by tons of funds.
  - asdff 8y ago
    Is it just as legally risky to go to a store with a little mechanical counter and count heads?
catacombs 8y ago
> It’s unfortunate that news organizations as reputable and prominent as the NYT only get on these stories so late in the game. This information would have been more useful to the public back in 2013. It's likely The Times just didn't have enough, or access to, this data to do solid reporting. If there are people in and out of the industry who are willing to share data that can advance an important story, these things might get out faster.
Aeroi 8y ago
Interested in these strategies. Is most of the location based data relevant to consumer companies and retail sectors? Trying to think of how hedge funds would apply this location data to other sectors. I've wanted to use a weather mesh network for a while in commodities and other spaces, but the info has been hard to collect without building a private sensor network.

by afpx 8y ago

kasey_junk 8y ago

Because the hedge funds are by definition not insiders? They are literally not using non-public corporate data at all. Insider trading laws don’t exist to make sure there isn’t information assymetry, the market is all about that assymetry. Insider trading laws are about insiders stealing from other shareholders.

afpx 8y ago
Well, it is non-public data. I once spoke with a lawyer to see if I could legally use location data to do the same thing (for instance, it’s easy to correlate changes in activity at certain retailers with quarterly earnings), and I was told it’s risky.
- mentat 8y ago
  It is not true in the United States, other countries differ: https://www.bloomberg.com/opinion/articles/2018-12-03/insider-trading-in-the-potato-trade https://www.bloomberg.com/opinion/articles/2018-12-03/inside...
- froindt 8y ago
  Non-public and insider are two different concepts. I could send a satellite to space, take pictures of parking lots, count cars, and it'd be a pretty decent indicator to the relative success of a retailer. Add some other signals into the model and it'd probably be good. I don't need to give the public access to my satellite images. But if I wanted to make a subscription service for 100k/month, I could. It would be non-public, but not insider.
  - kasey_junk 8y ago
    https://www.google.com/amp/s/www.thestreet.com/amp/story/13680468/1/orbital-insight-uses-satellite-images-to-give-hedge-funds-trading-tips.html https://www.google.com/amp/s/www.thestreet.com/amp/story/136...
- jonknee 8y ago
  That's not risky, it's done by tons of funds.
- asdff 8y ago
  Is it just as legally risky to go to a store with a little mechanical counter and count heads?

catacombs 8y ago

> It’s unfortunate that news organizations as reputable and prominent as the NYT only get on these stories so late in the game. This information would have been more useful to the public back in 2013. It's likely The Times just didn't have enough, or access to, this data to do solid reporting. If there are people in and out of the industry who are willing to share data that can advance an important story, these things might get out faster.

Aeroi 8y ago

Interested in these strategies. Is most of the location based data relevant to consumer companies and retail sectors? Trying to think of how hedge funds would apply this location data to other sectors. I've wanted to use a weather mesh network for a while in commodities and other spaces, but the info has been hard to collect without building a private sensor network.