Best part about this is that it takes a lot of what is in Peter Zeihan’s books (which are super interesting from a thought exercise perspective) and actually applying an investment framework overlay on top of it which is what actually matters. Until you make a directional bet on it it’s just an academic debate.
When you say things like "Given the industry contribution, watching wholesale data and vehicle production data is important for a macro view", or "Industrial production and its connection with investment as well as the current account will be key relationship to monitor", how do you think about the amount of time that you have to act on these data flows? I assume there is a scale based on market depth and advancement, with the US being the most deep and therefore the fastest that information is priced into a market.
I guess what I'm getting at is how do you think about your own required execution speed from the time that a piece of data, say the industrial production data for Mexico, comes out vs. large scale HFs, institutions, etc. - like do you have minutes, hours, days, etc? I'm sure this also factors into what you spend your time and capital building as to not compete with the largest, most informed market players (unless there's something to be said about nimbleness and the ability to fill those trades faster which I'm sure there is). Sorry if you already covered this in one of your pieces! I have a feeling part of this might be covered under the market microstructure article which I'm looking to knock out today too. Thanks!
What I would say is you want to see how the data is describing the GIP situation and then see how the market is implying a specific situation via its pricing expectations.
Fundamentally, you want to have a view on GIP and then see if the markets expectation of that is realistic or not.
Best part about this is that it takes a lot of what is in Peter Zeihan’s books (which are super interesting from a thought exercise perspective) and actually applying an investment framework overlay on top of it which is what actually matters. Until you make a directional bet on it it’s just an academic debate.
Absolutely 🤝
When you say things like "Given the industry contribution, watching wholesale data and vehicle production data is important for a macro view", or "Industrial production and its connection with investment as well as the current account will be key relationship to monitor", how do you think about the amount of time that you have to act on these data flows? I assume there is a scale based on market depth and advancement, with the US being the most deep and therefore the fastest that information is priced into a market.
I guess what I'm getting at is how do you think about your own required execution speed from the time that a piece of data, say the industrial production data for Mexico, comes out vs. large scale HFs, institutions, etc. - like do you have minutes, hours, days, etc? I'm sure this also factors into what you spend your time and capital building as to not compete with the largest, most informed market players (unless there's something to be said about nimbleness and the ability to fill those trades faster which I'm sure there is). Sorry if you already covered this in one of your pieces! I have a feeling part of this might be covered under the market microstructure article which I'm looking to knock out today too. Thanks!
What I would say is you want to see how the data is describing the GIP situation and then see how the market is implying a specific situation via its pricing expectations.
Fundamentally, you want to have a view on GIP and then see if the markets expectation of that is realistic or not.