Menu Our services in the selected location:
  • No services available for your region.
Select Location:
Select Location
    Remember my selection
    Your browser is out of date.

    Explore how we can help you

    Talk to Us
    GSAM Connect 
    |
    May 17, 2016

    GSAM Connect | May 17, 2016

    May 17, 2016 | GSAM Connect

    The Data Revolution in Investment Management

    Today, there exists an enormous amount of data about every company— data which potentially can influence stock prices and other investment opportunities. As individuals, we may struggle to keep up with the torrent of information from hundreds or even thousands of sources. But new data-analysis tools can help find signals in the noise.

    For example, tools which spot surging web traffic can help pinpoint sales trends faster than traditional methods. Satellite images can be studied to detect the movement of shadows across the floating lids of oil storage tanks – the shadows can reveal refineries’ supply and production capacity on a real-time basis, potentially ahead of official statistics.

    US Official CPI vs Billion Prices Project CPI

    The Data Revolution in Investment Management

    Source: MIT Billion Prices Project

    Here’s how these techniques apply to even broader macro trends, such as consumer prices. In the past, investors often relied upon the official monthly Consumer Price Index (CPI) report from the government. But traditional methods of calculating inflation – whereby the government physically sends surveyors into malls, grocery stores and so forth – are inherently limited, lagged, and instantaneously stale.

    Now consider Massachusetts Institute of Technology’s (MIT) Billion Dollar Price Project, which calculates price levels in real-time by aggregating information from hundreds of online retailers from around the world. The speed and accuracy with which the Billion Prices Project CPI tracks the economy is a testament to the power of Big Data analytics. We see it as a prime example of how investors with the right tools and processes in place can harness an information advantage.

    Data, of course, presents little value unless it can be transformed into timely and actionable insights, which is where investment managers come in. Computers and technology alone are not enough – we see careful stewardship of the power of data as essential to investment success.

    GSAM Connect
    Stay posted on the latest market developments and key themes for your portfolios and practices.
    Get Connected

    Related Posts

    April 21, 2016 | GSAM Connect
    Interview: The Upside of Japan's Corporate Reforms

    Corporate governance reforms could be the most important driver of Japanese equity performance this year – GSAM Fundamental Equity Portfolio Manager Ichiro Kosuge explains why. 

    January 19, 2016 | GSAM Connect
    Developed Market Equities: a New Leadership?

    We see upside potential in European and Japanese equity markets for three primary reasons: Changing market leadership, the Eurozone recovery, and the Japanese corporate governance revolution.