Benefits for Investors

Evidence suggests that exceptional portfolio performance continues to be impacted by the recognition of a change dynamic and the correct identification of the impacted industries and companies.

 

Our Hedge FundLong Only, Mutual Fund and Private Equity clients understand that the early identification of inflection points, at both peaks and troughs, and their implications, can translate into new long and short investment opportunities as well as changing perspectives with current portfolio holdings.

Linking change to opportunity is the culmination of our service. We work with our investor clients to apply our intelligence to their investment decision making by providing:

  • New investment themes
  • Industry opportunity and risks
  • Emerging industry identification
  • Long and short company opportunity and risks
  • Sector weightings
  • Private equity portfolio company opportunity and risks
  • Due diligence

Client Quote

"Inferential Focus provided me some of the most valuable and original research outside of Goldman Sachs. Their work frequently challenged conventional wisdom, encouraged me to 'think outside the box' and continually forced me to reexamine investment conclusions."

Chip Otness
Managing Director
Goldman Sachs (retired)

Client Application Examples

Video Games Grow Up

December 10, 2015

The Context

 As of August (2015), global spending on video games this year was on pace to be approximately $92 billion, larger than the direct consumer spending on movies and recorded music…combined. Beyond passing Hollywood and the music industry  in revenues, the video game industry seems to be following aspects of those industries’ historical script. Just as movies and music grew and evolved throughout the twentieth century, the video game industry is now transforming itself into something bigger, something different and increasingly, something artistic. While many video gaming-related companies have done well over the past few years, they are also in a transformational period with potential growth to come, because, like motion pictures and music before it, the gaming industry is utilizing new technologies, platforms, distribution methods and storytelling techniques, all while growing its cultural impact throughout the world.

 

Read The inFocus...

Implications

  • E-sports and the viewing of others playing video games are still very early in their growth stage.
  • Video-gaming companies that offer the games used in e-sports competitions will continue to grow.
  • Video games are growing their market share in the  Battle for Consumer Time.
  • The video-game industry is an economic force on par with Hollywood and the music industry, and as a cultural force, it is moving to the mainstream.  For those under 40, it is already a mainstream cultural attribute.

Applications

Long video games platforms and distribution. A list of potentially impacted companies we provided returned 69% in the 26 months following our inFocus.

Long video game developers. A list of potentially impacted companies we provided returned 100% in the 26 months following our inFocus.

Military Arms for Image and Profit

March 25, 2015

The Context

Gunboat diplomacy has evolved into the Propaganda of Power. The nineteenth century practice of deploying advanced naval power to coerce lesser-powered countries to yield to the wishes of an imperial power has shape-shifted into a twenty-first century practice of using superior air and sea capabilities to threaten the sovereignty and security of lesser-powered countries for the purpose of triggering fear. Russia and China have become adept at this new iteration of public displays of power. Such practices have enlivened the arms market, as countries deploying the Propaganda of Power seek to increase their image of menace by increasing their weaponry and as the countries that are feeling the brunt of that power propaganda increase military spending to defend themselves. Curiously enough, this focus on current military weaponry, while both necessary and heretofore effective, has the feel of being out of date, as new weapons move up the list of priorities and change the very concept of a battlefield. The turn to cyber and digitized weapons will expand the range of the arms market and bring new players into the industry.

 

 

Read the Briefing...

Implications

  • Military spending increases globally.
  • The U.S., China, Russia and others increase arms exports.
  • Cyber war/espionage increase.
  • Increased use of automation and robotics defenses.
  • Ramp up of the militarization of space.
  • Asian countries spend more on defense as China gets aggressive.
  • Potential for military conflict increases.

Applications

Long UAVs and components. A list of potentially impacted companies we provided returned 32% in the three years following our Briefing.

Long military hardware and software providers. A list of potentially impacted companies we provided returned 24% percent in the three years following our Briefing.

The S&P 500 returned 9% during the same period.

China's Push Towards Global Preeminence

May 4, 2015

The Context

China’s “new normal” seems to be less dynamic than the wondrous spurts of growth that it experienced in the past. But China’s new strategic push seems to be much more dynamic than the “harmonic rise” advocated by past Chinese leaders. Essentially, current leader Xi Jinping has set a course to make China preeminent among the nations of the world. He has started this push by seeking superior status in: (1) trade; (2) global finance; (3) new market development; and (4) international infrastructure build-out. This strategy is exemplified in the New Silk Road project, which is actually two extensive undertakings, one being an overland trading route (the Silk Road Economic Belt) and the other being a sea route (the Twenty-First-Century Maritime Silk Road), which together go by the shorthand name One Belt, One Road. Beijing is moving unusually fast to get these projects going, perhaps because it sees the internationalization of China’s capabilities as critical to supporting any kind of sustainable economic growth at home and to spreading the country’s influence globally.

 

Read the Briefing...

Implications

  • Chinese digital platform companies benefit
  • Chinese physical and digital infrastructure companies benefit
  • Foreign infrastructure companies that help develop the Silk Road benefit.
  • Developing economies along the New Silk Road trade route could greatly benefit from the movement of goods through their lands, and the trade could trigger growth in each country.
  • Any country aligned with the whole project will benefit economically.
  • Should the Chinese push to preeminence be successful, it could alter the world’s financial architecture, its trade alignments and its power alliances.

 

Applications

Long Chinese digital platform companies. A list of potentially impacted companies we provided returned 59% in the three years following our Briefing.

Long foreign infrastructure providers to the Silk Road Project. A list of potentially impacted companies we provided returned 16% percent in the three years following our Briefing.

 

Contact Us

Phone: 212-683-2060

Email: info@inferentialfocus.com

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