"One analyst who was considering a possible stake in Avon Products developed her own edge by becoming an Avon representative. Another was contemplating a short in a Korean carmaker whose engines were said to malfunction, so he bought two of its cars and hired a mechanic to test them"
The excerpt above is from Sebastian Mallaby's "More Money Than God: Hedge Funds and the Making of a New Elite". Thought it'd be interesting to hear from the more experienced folks here on some of the more creative methods they have used or heard about.
Buy FANG
Highly intellectual comments only
Spend millions of dollars acquiring alternative data from reputable firms that validate well against reported results.
Millions really? Must have been one hell of a position lol
50% sizing, 2 positions lol
Cramer said he once sat outside some clothing retailer at the mall to see if people went in and bought stuff. They didn't so he put a short on the stock.
Ackman did a lot of alternative stuff when he shorted herbalife.
Yeah I watched a documentary on it, I remember he wen't directly to the people who got screwed
Honestly anecdotal data is weak. The best way to build an edge is to create really efficient and effective surveys. If you can find the right people to survey to understand a business or industry, you can develop an edge.
Guess this is more or less the business model of expert networks yeah?
Yes they do that too, but usage around that revolves around the Delphi method, which is different. A survey of experts is not the same as a survey of individuals who work at key conjunctures in the supply chain or organizational structure of the business or industry you are analyzing.
There was a fund from California which flew drones over the Tesla factory to work out how many cars were being shipped out which I thought was pretty creative and required quite a lot of research from what the interview I listened to said about what he did/how he went about it to make sure he was not breaking any laws.
do you remember where did you find the interview? or could u link it? tnx
It was episode nine (May 28 2020) of the Carolina Stories podcast "Detective work in silicon valley" with Glen Kacher who founded Light Street so Google that depending on which platform you use for podcasts. He is a great listen / follow on Twitter as well for his thoughts on investing.
That's similiar to using satellites or drones to fly over oil wells and calculate how much oil is there right? Tho that's a lot more mainstream than it used to be.
Some retail analyst do that with drones or satellite to track number of cars in parking lots at malls...or did do that
Except TSLA doesn’t need good alternative data or fundamentals to go up
Nobody is going to post creative methods here. I would recommend reading a lot of great pitches online and assessing all of their claims with the following question: "how did this person figure out X?"
What are the best websites for stock pitches and analysis?
Value Investors Club is good. If you sign up, you get a 45 day, delayed feed, which imo, doesn't matter, as 99% are long term write-ups anyhow. Also look up investors you admire and see whether they have a publicly known VIC membership, example Burry (Value Investors Club / michael99), so you can get an interesting look into their investing 'style'. Or you can filter by contest winners/ highest overall performance/ quality, and you'll find some good stuff.
Two other good ones are MicroCapClub & Sumzero, however you need to have a very good write-up, and (with Sumzero) be an actual buyside analyst, to get in.
But then again VIC has loads of great write-ups anyway.
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