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Hedge funds use satellite images to beat Wall Street

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Re: Hedge funds use satellite images to beat Wall Street

#171

Post by jermaustin1 »

eeZah7Ux wrote: post #159
ISL wrote: post #25

As an occasional retail trader, it doesn't bother me at all that other market participants are trying to be better informed. In fact, it means that market prices are more likely to be properly-priced. We should not aspire to drag hedge-fund research down to the Main Street level. If there is a place for government in this context, it is to fund the education necessary to help retail investors learn a) how to take ben…

> it doesn't bother me at all that other market participants are trying to be better informed You should stop trading now.

Why?

Re: Hedge funds use satellite images to beat Wall Street

#172

Post by tryptophan »

tanderson92 wrote: post #166
tryptophan wrote: post #160

Earlier quoted context omitted.

This is called front running and is super illegal.

Not all front-running is illegal, see this article which discusses a few examples, including quote matching and order anticipation: https://blogs.cfainstitute.org/investor/2013/04/24/what-to-d... Front-running is very common in bond trading.

Quote from your article: >HFT greatly reduces average trading costs for investors

They are market-making, which is something else entirely than front-running.

Re: Hedge funds use satellite images to beat Wall Street

#174

Post by eeZah7Ux »

paradox1234 wrote: post #30

Honestly, I'm not particularly impressed. There are a lot of other trading edges that could be found for a lot less hassle and money, but I guess that's also the beautiful thing about the market - more ways to skin a cat than anyone can imagine, and it's also not a zero sum game.

> also not a zero sum game

Indeed, it's negative. While the big funds steal money from small investors the waste of energy and the pollution caused by launching satellites remains.

Re: Hedge funds use satellite images to beat Wall Street

#176

Post by sokoloff »

est31 wrote: post #157

Hedge funds do a ton of crazy research like this. I remember reading about hedge funds buying new cars only to sell them immediately after. They were only interested in their serial numbers which they used to estimate the count of sold cars of a specific model using the german tanks method. Before the sales numbers are out, information like this is very valuable.

We sell customized products. A little over a decade ago, we noticed a few orders going out that were not at all customized or were customized in a way that suggested the customer wouldn't be happy when they got them. We tracked down the account (based in NYC) and they'd been ordering products about every 45 days (mid quarter and end of quarter) and they'd never complained nor asked for a refund.

Seems they were after the shipping identifier, as when we changed the shipping identifier to not leak shipment volume information, the orders soon stopped.

Re: Hedge funds use satellite images to beat Wall Street

#177

Post by bluGill »

bongobongo wrote: post #128
javert wrote: post #77

Earlier quoted context omitted.

Why is trying the interests of retirees to shareholders "kind of dumb and fucked up"? I'm not even sure there is a valid distinction between the two groups. The retirees are shareholders.

Gee, I dunno, maybe think about it for a second. What does a 65 year-old lower middle-class retiree with some money stashed in a 401(k) have in common with an ExxonMobil shareholder aside from the need to generate as much profit as possible? Do you really think this makes sense from a public policy perspective, to pit the retirement needs of the old against, e.g., the environmental health of the young? Please spare m…

Retirement funds are the largest shareholder of all. The 65 year old alone isn't much, but all of them combined together are more than any other category of shareholder. Middle class retirement accounts own more stock than the rich.

Re: Hedge funds use satellite images to beat Wall Street

#178

Post by Diederich »

bluGill wrote: post #23

Nothing new here other than satellites. Years ago (1990s?) Peter Lynch - at the time manager of the largest mutual fund followed his daughters into a shopping mall for back to school - his daughters didn't go into GAP stores so he went back to the office and sold as his shared of GAP. His fund beat everyone else by a large margin because GAP stocks dropped a month latter when they announced the earnings drop. This is…

> This is better of course, but nothing you can't do in some other way with a little work.

I worked at one of the companies doing machine learning on top of large quantities of satellite imagery and selling the results.

It's more than a little work; it's pretty challenging, in a variety of ways. Just the training aspect is surprisingly difficult to get right.

Re: Hedge funds use satellite images to beat Wall Street

#179

Post by fyz »

Some of the comments conflate retail traders with regular Joes and Janes. A lot of hedge fund investor money comes from pension funds who are placing retirees' money either directly or indirectly into hedge funds.

HF compensation is different can of worms.

Re: Hedge funds use satellite images to beat Wall Street

#180

Post by noir_lord »

Kapura wrote: post #44

I think the most important part is this quote: >“What we found is that it’s a gain for large sophisticated investors who can afford the substantial costs of acquiring and processing big alternative data” This is yet another example of wealth accumulating, of rich actors getting richer faster than poor ones. Without some controls on the behaviours that allow wealth to accumulate, it will further concentrate among the…

Shrugs.

Any game where you get more of an advantage the more points you accumulate from a fixed pool of points is going to rapidly result in an unequal share of the points going to the first person to acquire the advantage.

Monopoly was created as a game to warn of the pitfalls of capitalism (it's a simplified form of the winner takes if not all a disproportionate share scenario that is life)[1]

http://www.bbc.com/capital/story/20170728-monopoly-was-inven... [1]

Of course that I think this puts me at odds with many people, I like capitalism, I like the social pluses of it but I believe that capitalism should be sub-ordinate to society directly (more what you see in the north of europe) and less the other way around (pretty much most other places and arguably the US).

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