Tesla is a good example of why alternative data hasn’t helped the hedge fund industry as much as hoped - even if you knew sales or earnings in advance, it’d have been hard or impossible to make $. We live in cash flow from financing world, not cash flow from operations world
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Second, it’s not true that alternative data hasn’t helped. Some of it has been and still is very predictive, you just need to know where to look (and have tested a lot of data sets out of sample).
Would like to see results of the strategy in my first tweet though, as I may be wrong.
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quarterly releases contain a lot more info that can move the stock in the opposite direction from what you’d expect just from the earnings number. still I think your strategy would work especially on the outliers. isn’t this how people make money insider trading?
Thanks. Twitter will use this to make your timeline better. UndoUndo
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I feel it probably still is valid but other distortionary effects need to be accounted for. Tesla is just a sterling example. Retail participation/holding is probably a strong determinant.
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The issue is the propensity of speculation should be related to how much fundamental variance there is in a name -- so in a highly speculative market, I'd imagine you can see a lot of outperformance on earnings dispersion.
End of conversation
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