Hedge fund manager letters are a great source of investing wisdom and market intelligence. In order to better understand the meta game of markets, we analyzed a sample of nearly 200 first and second quarter hedge fund letters using natural language processing (NLP) tools in Python. These funds covered a wide variety of strategies, but all had significant exposure to equity markets. In this piece I highlight the key themes of these letters, along with how sentiment has shifted as the pandemic has run its course, and the stock market […]
“Fundamental” analysis and “quantitative” analysis used to be separate. Fundamental analysts read 10-Ks, built 3 statement models, and did channel checks, leading a to a final qualitative buy or sell decision. In contrast, quantitative analysts or “quants” built algorithms to scour mountains of market data for hidden signals on which to make ultra fast buy/sell decisions.
Typically firms specialized in either fundamental analysis or quantitative analysis, but not both. Larger multi-strategy firms might have both fundamental and quantitative strategies, but their analysts were likely to be […]