Google+

a better
funding model

How we get investors
the best ideas

founder
friendly

we help ideas become successful companies

venture
capital

for today's innovative startup companies

disruptive technology investments

venture capital the way
it was meant to work

How Long Before Securities Analysts Become Data Scientists?

The problem, according to the author is that,

Equity research has marginally evolved with investment styles and trading strategies over the past couple of decades.  The days of primary fundamental research, particularly on the sell-side, faded long ago.  Most analysts don’t have the gumption or the time.

Shrinking commissions and heightened regulatory scrutiny yield lower returns on investment, continuing a cycle of reducing research resources.

Even the best-resourced analysts lack the tools to correlate the data points he/she does gather to identify meaningful patterns for either an individual company or an entire sector.  Finally, with shorter-term investing horizons and high-frequency trading dominating volume, how relevant are these data points anyway?

Therefore, to stay competitive and increase their value, analysts will still need to perform their traditional function of fundamental analysis but,

analysts will have do statistical modeling and use analytics tools to gain a deeper understanding of what drivers move markets, sectors or particular stocks.  Data discovery and visualization tools will replace spreadsheets for identifying dependencies, patterns and trends, valuation analysis, and investment decision making.  Analysts will also need a deeper understand of client strategies and trading styles in order to tailor their “research” to individual clients.

 

 

 

 

Comments are closed.