Your goal as an investment manager is to give your investors the highest risk-adjusted return possible. You likely receive plenty of outside research, but not enough of it is what you actually need. In fact you have to sift through a deluge of emails to find those few pieces of information that actually are useful. And you are only willing to pay for research that increases your investment performance.
Tailor Research provides investment managers with exactly what they seek, because instead of the normal supplier driven research, Tailor’s research is customer driven. In other words, you the customer decide where you would like the research focused, and then we supply the research to fit your needs.
One of the reasons why it is difficult for you to outperform competitors is because they have the same market intelligence, whether it is SEC Filings, sell-side research, or management announcements. Tailor Research provides research that is proprietary to you, which means that you are the only one who will profit from the information.
It is likely that the sell-side research firms that contact you are using the same data to reach their conclusions: SEC Filings, Earnings Calls, Management meetings, etc. Each of them has their own models and different interpretations but the data they use to reach their conclusions is essentially the same. Furthermore, the most important data has already affected stock price by the time it hits the news wires.
Lately, you have seen a lot firms advertising access to "channel checks." This is a step in the right direction in that it gives you customized intelligence that other investment managers probably do not have; however you cannot tell how effective the industry expert (or two) is, whether the expert(s) has a biased opinion, how large his breadth knowledge is, etc. The point is that one or two experts, statistically, is not a strong sample size in which to base your investment decision.
Tailor Research gets a statistically significant amount of channel checks but still tailors the answers to your questions in proprietary way (i.e. for your eyes only). Furthermore, we look at each of our experts monthly to measure how accurate they have been in the past. We weigh their responses to your questions according to their past success. As time passes, the accuracy of the research report gets better, as Tailor’s algorithms hones in on the best statistical answer. We also weigh the opinion of other research analysts and factor how accurate they have been. Literally, hundreds of algorithms are applied to your research report before you receive it with one purpose: to increase your risk-adjusted investment performance and give you the best statistical opportunity to succeed.
EXAMPLE
Jack Smith, a hedge fund manager, is thinking about investing in Goodyear Tires Inc. He gathers Wall Street research from all the top investment banks and realizes that they are all saying essentially the same thing: With oil prices going from $140 a barrel to $70 a barrel, each Wall Street analyst is estimating how much Goodyear will lower prices, and how that will affect how many customers will buy tires. The hedge fund manager knows that when the company announces earnings, it will be too late to take advantage of Wall Streets’ confusion.
Jack logs into the Tailor Research platform and asks questions about how much Goodyear lowered price and how that affected volume. While doing so, he inquired about competitors.
A short time later he logs back into Tailor’s platform and gets the results of his queries. Tailor’s research shows that Goodyear (and competitors) lowered the price of their tires by 6 percent on average. Furthermore, the lower price increased volume by 7%.
Tailor’s proprietary algorithms triangulate the volume and price data to come up with revenue and earnings estimates for each tire company. The algorithms take into account the accuracy of the channel checks participating in the study, as well as historical margin changes—to give Jack the best estimates statistically available!
The guesses by other analysts become irrelevant. Jack has the facts. Now he invests in the tire companies gaining market share. When earnings are released, he has a nice gain!