robwebb2k

A post by Roger Ehernberg on Information Arbitrage led me to Marshall Wace, a hedge fund that, according to Wikipedia, is one of the biggest funds in Europe and accounts for 3 or 4 percent of equities traded in London (their logo actually looks pretty cool on their site). For several years, the fund has generated solid returns from the TOPS system (“Trade Optimized Portfolio System”), which “collects and evaluates investment ideas generated across the securities industry, so as to create optimised (sic) portfolios which have historically delivered attractive risk-adjusted returns.” It seems like they track sell-side research performance, put money on who’s hot, and pay the sell-side for performance. Although it seems like a simple concept, apparently MW is on the cutting edge with this and remains so today – no other fund advertises using such a system. However, the performance trackability seen in social web 2.0 sites Yardbarker and SocialPicks, which I have posted about before, seems to be similar. Like MW, these sites cut through the “noise” and allow individual investors & gamblers to put their money on the backs of those that are hot.

I like this trend towards performance tracking. I hate to say that its is a feature of web 2.0, but ever since PPC carried the day, there seems to be an increasing premium placed on noise reduction and compensation for value. This is definitely a good thing for those that add value and a bad thing for those that don’t.