The Robots Are Coming for Wall Street

I guess this is a PR piece? Lots of companies are in this space, you could argue this is what Palantir does.

It used to be before computers that someone had to go to the microfiche to pull the time series data required to analyze what the markets did during certain periods. Nowadays Bloomberg or Tompson Reuters will do this for you without requiring you to even start excel.

So I guess "robots" are coming in the same way that computers previously came for data entry and retrieval people. The analyst position has been shrinking since 2008 from my experience. This makes sense when you consider the Investment banking funnel.

- 1000's of analysts get hired on 2 year terms each year. This is often why you'll see people who spent 2 year stints with Investment banks and then left. It's really hard to get hired as an Associate and the analyst position doesn't really carry anywhere near the "prestige" of being a full time Associate. It's close to the equivalent of saying you did a co-op term with Google. You did work for Google but you were never a full time employee who went through the entire interview process and were deemed worthy.

- 10%-20% become full time positions (Associates) after a couple of years.

- 10% of those become VP's after 3-4 years. Most people cap out here.

- 10% of those become Managing directors(there are several tiers here, and you'll run a specific book and have your own team and pnl if you get this far).

Since investment banks have been shrinking head count its not surprising that they are looking for ways to decrease the number of analysts they hire. It's the one position where people don't really give it any respect.

I've never actually seen their product but if it works they'll have no problem making money. The biggest single expense most funds I talk to have, is building out the technical infrastructure to aggregate data in an easy to use method. Jim Simmons of Renaissance Technologies fame was quoted as saying their single most important piece of technology was their back-testing and data aggregation framework.

Is this a submarine PR piece for Kensho? The company is mentioned over thirty times in the article.

The newest clickbait trend is to call software "robots."

Such sophisticated back-end technology, and sadly the interface still requires mashing ctrl-R repeatedly to see the latest updates! Having worked in financial technology, I've seen this lack of consideration on human-computer interaction first hand. Much of the information displays are not much more sophisticated than the ticker tapes of the 80 and 90s.

Edit: On an unrelated note, I'm surprised that their reports take so long after the announcement. 5 minutes after the release most of the information has already been priced into the markets.

As someone who has watched class after class of analysts put together 50-page pitch books of which <5 will be read, the day of the robots cannot come soon enough.

Good article. Although the danger is that, if everyone is using this type of software, this creates a herd mentality whereby everyone is doing the same thing. The stock market only works correctly if there is diversity and independence of opinion... things that are slowly decreasing in this instant-access global wired world. To me, this means that there will always be a place for the out-of-the-box thinker.