AtlasTrend has achieved some very strong investment returns for our members over the past 12 months to April 2017 with 3 of our Trend Funds gaining between 11.66% to 15.47%. You can see the details of the latest performance for AtlasTrend’s managed funds here. How do we go about investing to achieve these returns?
It’s a combination of the technology of big data analytics and good old fashioned human brainpower.
This information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situation and needs.
Big data investment analytics
You might know that the Trend Funds can invest in any company listed on a developed market stock exchange (outside of Australia and New Zealand) with a market value greater than US$1 billion. That’s around 5,000 companies in total.
Each of these companies have huge amounts of relevant data points that can be analysed. Since no human can analyse so much data manually and efficiently, we built a big data analytics system based on our investment team’s combined near 50 years of investing experience that could take on the task. This is how it works.
What happens after the big data investment system completes its analysis?
Within the list of 5,000 companies, every company is ranked by the system based on analysis of the data points. The highest ranked companies are more likely to be the best potential investments while the lowest ranked companies are the opposite. At this point, our investment team take over the investment analysis.
How are people involved in the investment analysis?
Our team focus their attention and conduct deep fundamental analysis on the higher ranked companies that are relevant to the Trend Funds.
This involves understanding in detail how the company makes money, the certainty of its forecast earnings, the near term and long term competitive threats, the track record of the management team, who the key customers are plus other qualitative factors. After this analysis, we make an investment decision whether to invest or not.
What are the key advantages of combining big data technology with human analysis?
- Efficiently analyse the investment universe: We dynamically assess 5,000 companies with great accuracy using a much smaller team compared to many traditional fund managers. This results in lower costs which means we can charge our members lower fees.
- Helps avoid key human biases: Many scientific studies have shown every person has certain emotional and irrational biases when investing. For example, not selling a share you own because you’re losing money on it (click here for more on human biases when investing). The big data investment system actively helps our investment team avoid many of these biases through an objective analysis of investment data.
- Focus time analysing key investment opportunities: Our investment team focus on detailed analysis of the best in class companies rather than spending countless hours figuring out which of the thousands of companies to research. We often share a summary of these insights so you know exactly why we are invested in a company.
- Understanding the markets: Although computers do a great job analysing lots of data efficiently, there is still a gap on what specific investment action to take when certain situations arise which makes investing based purely on trading rules risky e.g. Donald Trump’s surprise election win or Amazon’s decision to grow revenue quickly at the expense of lower profits. Knowing what to do in these situations require a very good understanding of how markets may react. That is where our members have the benefit of the AtlasTrend co-founders’ experience who have worked nearly 50 years combined in the markets.
Will AtlasTrend one day leave the entire investment decision making to computers?
We manage a fund that invests in the growth of big data so we are keenly aware of the rapidly advancing powers of machine learning and artificial intelligence. IBM’s Watson computer can now read books (like you and I can) and answer complex questions posed in natural language. Google’s Deepmind artificial intelligence unit is working on machine learning that resembles the way humans learn.
It would be naïve of us to say humans are irreplaceable in the investment process but for the foreseeable future, people will still be very much involved in the investment analysis and decision making for every AtlasTrend managed fund.
AtlasTrend provides investing insights and access to managed funds built around world trends such as the exponential growth in big data.
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