Investment Risk and Relative Value: Hidden in Plain Sight

Some of the toughest challenges in capital markets today lend themselves to remarkably easy solutions. No need to grapple with political entanglements, strike delicate balances or engineer breakthrough innovations. Just acknowledge the problem and construct a solution that combines process adjustments and easily accessible technologies.

dataConsider the challenge of disclosure overload, the tsunami of financial data whose volume is rising as quickly as its value to the typical investor is diminishing. A recent KPMG report focuses on “the complexity of financial standards and the volume of mandated disclosures” as …”the most significant contributors to the issue of disclosure overload, and complexity, and footnotes are the most significant source or cause of complexity.”

Despite its polite language, the report builds no illusions around the severity and urgency of the problem, nor about its systemic repercussions. In fact, the survey results detailed in the report reveal broad acknowledgement by market participants that, without dramatic course corrections, the deluge of data will continue to rise, and the informational value of the data will continue to diminish.

This is precisely the challenge that my client — Capital Market Laboratories (CML) — was founded to address. The firm’s recently launched product represents a redemption of sorts for investors and financial analysts laboring under conditions of “data overload”, which increasingly obscures the most salient markers of investment risk and relative value. You can learn more about CML here and through these instructional videos. Also check out The Value of Visual Data, a summary of independent research findings on the possible impact of data visualization on the quality of investment decisions.

Upcoming CML Events

  • Small-group Luncheon in Los Angeles (September — date TBD)
  • Meetings with Clients and Distribution Partners in New York (October — date TBD)

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