Insights

I came across this Scientific American article in August and was struck by its relevance to a number of conversations we were having with investors. Without going into great detail, we were discussing a couple of investment opportunities that could be classified as esoteric or “off the run.” In many of the initial conversations, investors were trying to dig deeper into the opportunity in order to find an analogous thread that they could follow back to a previous investment or experience. While this is extremely valuable in helping suss out the types of risk inherent in any possible investment, what if the exercise misses the mark completely? What if we are applying our past experience incorrectly, neutering our ability to assess something that is truly novel?

Download as a PDF Introduction There’s a short preference test in this paper that most readers, if not all, will answer incorrectly. It’s a “preference test” (and not a quiz) because selections should be made without calculation or computation. I’m looking to test your intuition. Below I argue for why we should care about where our intuition is leading us, why it might be creating blind spots and how we can do better. Specifically, I attempt to demonstrate the limitations of financial judgement based on return to risk ratios (i.e. Sharpe ratios) and how using the following formula might lead to better outcomes:

  Renewable energy and low carbon-technology are coming at an increasing rate and may have a serious impact on the underlying fundamentals in the capital markets. Jon Creyts, Managing Director of the Rocky Mountain Institute, offers his insights into the ways in which our future will be shaped by these changes and the implications it will have on current business models.

  Starting in 2013 Domeyard did what today sounds impossible: build an investable HFT firm from scratch. The firm believes a meaningful part of its success is due to its highly flat managerial structure and diverse team. The unique culture allows them to attract talent in a highly competitive sector. In addition to establishing an appreciation for the technical challenges of HFT, Christina discusses talent acquisition and culture development as dimensions for competitive advantage.

    Many are waking up to the ways in which the internet and social networking influence our actions and have created “behavior modification empires.” How did we get here and is there any hope of a redesign that will save us from our addictive selves? If this future vision includes the individual sovereignty of data, what are the implications for machine learning and big data algorithms?

  While the media focuses on Bitcoin and it’s value as a digital store of value or censorship resistant global currency, many are building and investing in the future of the internet…not currencies. Olaf will discuss investing in internet protocols and how they will capture a majority of the value in a future built on decentralized, blockchain technology.

  Following Jon’s presentation, a panel of commodity managers discuss the ways in which this technology will change the fundamentals of the energy related capital markets and over what time frame this could take place.

  This industry is rapidly changing and highly technical.  How can institutional investors equip themselves in order to keep up and take advantage of the opportunity?

    Two innovative funds, Domeyard LP (an investable high-frequency trading firm) and Orthogon Partners (an esoterics fund focusing on unique, private and non-traded assets), will describe interesting aspects of their specialized (and completely different) approaches, setting the stage for a discussion of competition, talent acquisition, and maintaining an edge.

  We have just begun to uncover a world of opportunities made possible by decentralized, blockchain technology. Starting from “Blockchains 101”, Michael Casey discusses the massive technological and societal advances that are possible as well as the challenges that have yet to be overcome.