Hedge funds and market speculators are known for focusing on the short-term. Guessing whether or not a company “beats” or “misses” it’s quarterly earnings guidance numbers, and by how much, has become a parlor game critical to the strategies of many funds and traders.
But with a digital revolution that has produced a cascade of data for investors, hedge funds and others are focusing on very short-term information to paint a broader picture. A new venture called Planet Labs is capitalizing on the short-term data trend by launching a group of mini-satellites used to keep tabs on parking lots, docks, and farms to measure economic activity.
The Wall Street Journal’s Bradley Hope reports that hedge funds are eager to expand the use of this technology to add daily information to their data driven strategies.
A company called Planet Labs Inc. has launched a small constellation of what it calls “cubesats” that can deliver much more frequent imagery of economically sensitive spots than traditional satellites. Those spots include retailers’ parking lots, oil-storage tanks or farmland.
The company, founded by three former NASA scientists, has now signed an agreement to supply data to Orbital Insight Inc., which mines satellite imagery for trading tips for hedge funds.
Until now, Orbital has relied on monthly or bimonthly imagery for its analysis. The deal with Planet Labs will give them access to weekly images at first. Next year, if Planet Labs succeeds in a plan to launch another 40 or so cubesats, Orbital will have access to daily images of every piece of land on earth.
“Almost all economic activity is change,” said Jimi Crawford, a former Google executive who founded Orbital. “Once you get down to daily images, tremendous new horizons open up to being able to monitor and track that change.”