Kinetic Investment – Part 3 of III

Why Change? Why Now?

There are many reasons to lean into the Kinetic Investment Environment but the most compelling reason is differentiation.  This environment complements your most important resource, People, and challenges them to build a creative investment environment.  The Kinetic Environment also fits with more stringent operational and risk protocols via templates and heatmaps.

The Path To A Kinetic Environment – Leveraging Existing Infrastructure

While the quickest path to a Kinetic Environment is the replacement of existing tools and technologies, most firms are not in a position to decommission large swaths of investment technology.  The good news is that existing investments can be leveraged with modest outlays.  Most firms have a solid foundation in database and data warehouse technologies.  These can easily be integrated with advanced analytics and dashboard technology.

From 2013 onwards

In the age of information arbitrage, simplification is power.  This simplification is achieved visually.  The investment team evolves to include financial modeling, data, and content skills.  The end product is a cohesive rule-based investment architecture that is theme-dependent and managed by a highly motivated, interactive team.  It’s not the 1980’s anymore.  It’s time to align the investment environment with the needs of modern information arbitrage.  

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Kinetic Investment – Part I of III

From 1980 To Today

 1980 was a year of momentous changes for Wall Street investment firms and trading desks.  A spreadsheet app named Visicalc was creating “Screen Envy” across firms as early adopters created a buzz with the analytical prowess of personal computing.   The U.S. federal deficit was $900B.  Dallas was the top-rated television show.  The Star Wars sequel, The Empire Strikes Back, captured the minds and wallets of audiences worldwide.

 Fast forward thirty-three years.  The U.S. federal deficit is $17T.  Dallas’s next generation is back on TV and five additional Star Wars movies have been released.  So much has changed.  However, the basic look and feel of an investment environment remains as it did in the early 1980’s…..until today.

 We are now at flex point that can shape the 4P’s (performance, process, people, and philosophy) for the next generation of trading environments.  This intersection accounts for the evolution of computer technology, big data, the human-computing interface, and algorithmic trading.   I call this vision the Kinetic Investment Environment.