Signals by AlphaSense

Episode Summary 

Expert interview transcript libraries are the easiest way to access primary research, which fuels better decisions for both investors and corporate professionals. But how are compliance issues resolved both on the library side, and on the client side?

In this episode, we spoke with Sean Farrell, Chief Compliance Officer at Stream by AlphaSense, the market’s leading library of proprietary expert interview transcripts. Sean has extensive experience in the area, including work as an examiner in the New York office of the SEC, Chief Compliance Officer at large asset managers, as well as a compliance consultant. 

Sean covers in detail the pre- and post-call reviews, meeting the highest standards of the world’s largest funds, client-level compliance workflows, compliance around direct calls with experts from the library, and how to screen out bad actors. 

Guest-at-a-Glance

💡 Name: Sean Farrell

💡 What he does: He's the CCO of Stream by AlphaSense and MD of IQ-EQ.

💡 Company: Stream by AlphaSense

💡 Noteworthy: Sean has over 20 years of experience with the major US securities regulator, the SEC, some of the most well-known asset managers, and as a consultant. 

💡 Where to find Sean: LinkedIn

##

Key Insights 

⚡ Achieving “highest common denominator” compliance is of paramount importance. Because of the nature of expert interviews and unique insights into company details, highest level compliance is key. Sean says, "The scrutiny's really very heavy as prospective subscribers complete very impressive due diligence processes on us, and it can be really tough to go through that crucible from time to time, but it's very satisfying from a professional perspective when that prospective client achieves happiness with the robustness of our compliance program."

⚡ Standardized, multi-layered processes are key. No single transcript is more important than the integrity of the entire library. Sean explains, "We have an automated workflow for this; so, no transcripts can move outside of the pre-designated workflow. The compliance review team is reviewing each recording and transcription. As I mentioned, nothing can make it to the library without affirmative compliance approval. So it'll just sit in the queue until we approve it or kill it. It can't move past that. We make compliance edits to remove information that doesn't meet our compliance standards. And sometimes we do have to kill a transcript because it just can't be cured no matter how much compliance editing you do."

⚡ Bad actors tend to stay away from recorded calls. As the memories of the 2009-2013 period have faded, there are bad actors looking to monetize material non-public information. Sean says, "The intentional bad actors avoid platforms where their calls are being recorded. They don't provide consent to have their calls recorded. And, of course, then a call won't occur with them on our platform. The act of recording is such a significant and powerful deterrent to those bad actors; it just keeps them off the platform."

In this episode, we spoke with Michael Maloof from Earnest Analytics, a leading provider of alternative data.

Our broad topic was the expanding use of alternative data, such as credit card transactions and geolocation data, by corporations and consultancies.

While "alt data" has been widely used by hedge funds for many years, its use in the corporate world is still relatively nascent.

Michael went over a number of specific examples, such as cohort analysis, promotion effectiveness, and Customer Lifetime Value (CLV) calculations.

We also covered data delivery and usage: while historically only hedge funds could afford sophisticated database analysis and API expertise, alt data providers have made great strides in creating "consumer app level" interfaces for broad use.


Guest-at-a-Glance

💡Name: Michael Maloof

💡What he does: Michael is the director of Marketing at Earnest Analytics, a leading alternative data provider for hedge funds, asset managers, consultants, and corporations.

💡Company: Earnest Analytics

💡Noteworthy: Michael started his career as an equity analyst at Goldman Sachs, covering tech and telecom, and this is where he started to appreciate alternative data sets 

💡Where to find them: LinkedIn｜Insights Blog｜Free Dashboards｜Twitter 

In this episode, we spoke with James Pomeroy, UK-based global economist at HSBC, and we covered a number of macroeconomic topics.

Starting off with inflation, the dominant 2022 macro theme, we explored the different drivers of inflation globally, highlighting the differences in the drivers between regions.

While energy drove the inflation jump in Europe, North America saw excessive shelter inflation, while the heavier weighing of food drove inflation in Emerging Markets.

Linked to inflation, we covered deglobalization and near-shoring. While generally perceived as inflationary, James brought up a few factors where it might not be.

We then discussed rates: we are seeing the first synchronized global central bank tightening in many years.

However rates as a policy transmission mechanism vary substantially from country to country: James contrasted the predominantly fixed mortgage rates in the US versus Sweden where the housing market has already softened considerably.

We then covered what might be the end of the US dollar bull market.

Finally, we touched upon global demographics: given China's entering a period of population decline, we discussed global labor force dynamics, and how the aging and shrinking of the workforce can be counteracted through robotics.

In this episode, we spoke with Meb Faber, CEO of Cambria Investment Management, an ETF manager that just hit $2 bn in assets. 

Our focus was on how Cambria has been able to grow and thrive in a world where the ETF giants have Assets Under Management (AUM) in the trillions through offering differentiated "quant lite" strategies.

Joining us from his Manhattan Beach, California, office, Meb covered the strategies that fueled their growth, starting with shareholder yield, which goes beyond dividend yield and includes stock buybacks.

We covered factor investing broadly, and how Cambria productized some of the strategies by combining them. We also spoke about tail risk protection, and how to think about global asset allocation.

We also touched on  Meb's popular podcast and email newsletter. 

Episode Summary 

In this episode we go over a framework for financial institutions failure, with Marc Rubinstein, a former financials analyst and portfolio manager, currently writing Net Interest. 

We cover the three main ways failures happen. First, we discuss fraud, both external and internal. Then we discuss underwriting, which affects both lending institutions and insurance companies. Finally, we discuss asset-liability mismatches, known as a “run on the bank”. We go back to the 1800s to today, when these happen (mostly) digitally. 

##

Guest-at-a-Glance

💡 Name: Marc Rubinstein

💡 What he does: He's the writer of the newsletter Net Interest and a former financial analyst and portfolio manager.

💡 Company: Net Interest

💡 Noteworthy: He's an investment professional with 25+ years of experience in researching and investing in financial services companies. He's also a retired partner from one of Europe's largest hedge fund firms.

💡 Where to find Marc: LinkedIn Twitter

Episode Summary

Understanding and avoiding common red flags in corporate filings with the US Securities and Exchanges Commission (SEC) is essential for buyside and sellside analysts, auditors, and external reporting teams. In this episode, we spoke with Michelle Leder, founder of Footnoted and author of “Financial Fine Print”, to discuss her top red flags both in terms of content and “metadata” like the timing of the filing itself. We also spoke about what are some of the best practices for external reporting teams at corporations.  

Guest-at-a-Glance

• Name: Michelle Leder

• What she does: Michelle is the founder of Footnoted. 

• Company: Footnoted

• Noteworthy: Michelle is also an author. Her book ‘Financial Fine Print: Uncovering a Company's True Value’ came out almost two decades ago, and she started the site, Footnoted, to promote it. Soon, Michelle started posting about the red flags she found buried in their routine SEC filings. From 2008 to 2018, she ran a subscription-based service focused on actionable disclosures in the SEC filings. After a five-year break, she has returned with Friday Night Dump. ''We call it the Friday Night Dump because what it does is it looks at the filings that are made after 4:00 p.m. on a Friday,'' explains Michelle. 

• Where to find Michelle: Mastodon｜Twitter｜Amazon

Episode Summary

Should your company “take a stand” on anything? How should this decision be approached? Will your action, or inaction, become news? In this episode of Signals, we try to answer these questions with Andrew Edgecliffe-Johnson, the US Business Editor at the Financial Times. 

We first discussed environmental issues, where the interests of shareholders and the broader stakeholders are often very aligned. Andrew discusses how Walmart has become a leader through both its scale and a thoughtful, detailed approach. Social issues vary quite a bit by geography and type, so Andrew offers a framework for decision-making. Finally, we discussed governance issues from a broader perspective, going beyond purely corporate governance mechanics. 

Guest-at-a-Glance

• Name: Andrew Edgecliffe-Johnson

• What he does: Andrew is the US business editor at the Financial Times.

• Company: Financial Times

• Noteworthy: As the US Business Editor, Andrew focuses on themes and concerns running through boardrooms in every industry and the people leading the debate on how business should intersect with consumers, employees, investors, policymakers, the economy, and society.

• Where to find Andrew: LinkedIn｜Twitter｜FT Profile

Episode Summary

In this episode, we sat down with Kevin Erdmann, the author of "Shut Out" and "Building from the Ground Up” for an extensive conversation on US housing, starting in the early 2000’s through today. 

His research points to inadequate housing supply in key large cities, such as New York and Los Angeles, driving the 2008 housing crisis rather than oversupply in “destination” cities such as Phoenix and Las Vegas. 

Misdiagnosing the problem led to a severe underbuilding following the crisis, as tight credit conditions effectively prevented new entry-level housing from being built just as the millennial generation was entering the prime home buying age. Covid, then, led to further dislocations especially in smaller markets. We ended the conversation with some policy recommendations. 

##

Guest-at-a-Glance

💡 Name: Kevin Erdmann

💡 What he does: Kevin Erdmann is the author of "Shut Out" and "Building from the Ground Up."

💡 Company: Independent Housing Researcher

💡 Noteworthy: Kevin Erdmann is a former small businessman and a researcher in housing, monetary policy, and financial markets. In 2015, Erdmann began to reconsider a range of evidence contradicting commonly held beliefs about the pre-2007 American housing boom. His first book "Shut Out" was published with the support of The Mercatus Center at George Mason University, where he continued to develop a revolutionary new approach to the practical roles of housing, debt, and money in recent American economic trends.

💡 Where to find Kevin: Website l Twitter

Episode Summary
Initial Public Offers, or IPOs, have been the traditional way for companies to offer shares to public investors. But in recent years we have seen several marquee deals doing this through a Direct Listing, bypassing a number of the IPO processes. Will this trend continue? We sat down with Dakin Campbell, author of “Going Public” and Chief Finance Correspondent, Insider, to discuss his book chronicling a number of notable offerings in the last few years, and what the future might hold. 

##

Guest-at-a-Glance
💡 Name: Dakin Campbell

💡 What he does: He's the author of ‘Going Public’ and the chief finance correspondent at Insider.

💡 Company: Insider

💡 Noteworthy: ‘Going Public’ is based on over 150 interviews with bankers, executives, and other direct participants in the marquee deals of the 2010s. 

💡 Where to find Dakin: LinkedIn, Book Website, Amazon, Insider, Twitter 

Episode Summary
Index investing has been a very successful, low-costing investing strategy that has grown considerably over the last few decades. But there have been a number of concerns regarding the growth of indexing and the influence of index fund managers. These issues revolve around governance, fears of anti-competitive behavior due to cross-ownership, fiduciary duty implications, and the distortion of market signals. We sat down with Robin Wigglesworth, author of “Trillions”: the definitive book on the past, present and future of passive investing, and editor at FT’s Alphaville, to discuss all these issues. 

Guest-at-a-Glance

💡 Name: Robin Wigglesworth

💡 What he does: Robin is the editor at Financial Times Alphaville.

💡 Company: Financial Times Alphaville

💡 Noteworthy: He is also the author of ''Trillions'', a book on the origins, growth, and implications of index investing 

💡 Where to find Robin: LinkedIn｜Twitter｜www.robinwigglesworth.com