Wednesday, January 23, 2013
In the event you haven't read it, there is superb essay in n+1 entitled Edge and The Art Collector. In it, Gary Sernovitz (whom I'd never read before) compares/contrasts edge in art with edge in investing, with particular respect to Steve Cohen and SAC. Of acute interest (in the factual realm vs. the philosophical or aesthetic) is a good description of SACs systematic exploitation of paying up for the call before the first call, honed by SAC, but also (not mentioned therein) well-employed by Marshall Wace's TOPS and similar first-mover strategies. This symbiotically leads directly back to the enablers on the sell-side are always seeking ways to monetize research, maximize revenue and get paid for even the slightest perceived info leg-up (release of research report, recommendation change, analyst estimate change etc.) that they themselves cannot legally exploit.