41 min listen
Eric Liu, Co-Founder and Head of Research, Vanda Research
FromAlpha Exchange
ratings:
Length:
54 minutes
Released:
Feb 17, 2023
Format:
Podcast episode
Description
Sketching out a business plan in 2012, Eric Liu and his Co-founders saw an opportunity to create a product that simplified the world of macro for investors. Vanda Research was born, a firm that seeks to connect the top-down with the bottom up and in the process, fill a gap by providing clients with shorter term tactical research ideas. A decade later, the evolution of Vanda leans heavily on the collection of and analysis of unique and often high frequency data sets. Making the point that “2020 was a year when alternative data sets went mainstream”, Eric reflects back on the Pandemic and the search for clues as to the speed of economic reopening, looking at various measures of supply chain disruption.With the notion that price moves result not just from how investors process new developments but also by the stance of positioning, a large component of the Vanda product is looking for instances in which investors are either over or under-exposed to assets. With respect to the latter, Eric cites palladium and platinum, both of which had substantially short positioning readings in late 2021. Combining data from dealerships, the team built a car inventory index that showed activity was bottoming about the same time, helping identify a trade in which palladium rallied by 80%.Much of our conversation also talks about the surge in retail activity in equity markets and how individual investor behavior can be aggregated for clues on market direction. Asserting that nearly all of the moves in the S&P 500 in 2022 can be explained by retail, Eric sees positioning a bit less stretched now than it was late last year. And while he sees some risk that the Fed needs to hike rates further, a glass half-full take is that the growth and profit environment that would motivate such moves would be a healthy one, giving further runway to the upside scenario.I hope you enjoy this episode of the Alpha Exchange, my conversation with Eric Liu.
Released:
Feb 17, 2023
Format:
Podcast episode
Titles in the series (100)
Christopher Cole, Founder and CIO of Artemis Capital Management: On behalf of his investors, Chris has developed systematic and quantitative strategies that trade volatility. His long convexity approach enabled his investors to thrive through the 2008 Great Financial Crisis. And through his deep dive research publications, Chris has made a real contribution to the industry’s understanding of volatility. Chris was among the small number of investors that saw the instability that lurked beneath the market calm in 2017 and capitalized on it during the XIV meltdown in February 2018. Fundamentally geared investors seeking to understand the sudden bursts of market volatility that occur with greater frequency will benefit from listening to the perspective Chris brings on the reflexive nature of volatility. by Alpha Exchange