Last month we launched a project we’ve been hatching for some time now—our elite research arm, Research by Potomac. And believe me when we say, this new mission has made waves in our inner circles.
Advisors, clients, friends, and colleagues have all been asking what we’re up to.
Is this a hobby? A daily journal? A ruse?
No, no, and definitely no.
Research by Potomac is a lot of things, but if we had to sum it up it could best be described as your all-access pass, your front row seat, your peek behind the curtain at the timely information and near real-time research we gather at Potomac to inform our investment decisions.
Why Research by Potomac?
We believe that the future of asset management will be powered by content and transparency, which is precisely why Research by Potomac aims to bring you both.
Our goal is to educate not only our own clients, but anyone interested in gleaning some insight into the current technical events shaping our investment decisions.
You want to use our services? Awesome! Let’s go.
You don’t? No worries. You can still access our research with no strings attached and no obligation.
The Initiatives – What They Are & What They Look Like
The time has come to lift the veil and we couldn’t be more excited. The research we’re providing comes directly from the people investing assets at Potomac—our Investment Committee—which means you can learn exactly how different systems and indicators that we’re using and thinking about drive our decisions.
RBP Initiative 1
What It Is: The Daily Note
What It Looks Like: Each weekday, receive useful, near real-time insight delivered directly to your inbox.
Macro Monday: We’ll start the week off with a high-level overview of what’s happening in markets across the world and across asset classes (not just the S&P 500, like a lot of researchers like to do). We’ll also provide insights on other indices like the Russell 2000, for example. We’ll also dive into fixed income, commodities, and currencies, as well. If it’s relevant, we’ll put it out there.
Sector Relative Tuesday: Because we can’t just talk about the market as one ubiquitous entity–there are eleven sectors within the market whose relative merits must be weighed in relation to one another—Tuesday will be dedicated to uncovering these relationships and what they mean for investments. Which sectors are leading? Which are lagging? Where are potential shifts taking place?
Midweek Update Wednesday: Here we’ll provide a rundown of what’s going on right now in the market, including a sentiment piece that addresses which way the crowd may be leaning.
Market Breadth Thursday: We’ll examine a number of breadth metrics that highlight the level of participation in the market’s current trend.
Key Themes and Relationships Friday: We’ll take an intermarket perspective to posit two mutually influential topics like copper and gold, small caps versus large caps, or even interest in real estate relative to what is happening in banks.
We believe the biggest opportunities and risks are the shifts that start to happen at the margin nobody is talking about. By consistently looking at the same indicators over time, we keep our finger on the pulse of these potential shifts and can act in time when necessary.
What’s unique about our model is that we aren’t just talking about things for the sake of talking about them. We’re actually using them!
Sector Analysis—we’re using it.
Relationships—you guessed it, using this one, too.
These focus points are built into the way we trade. They are a part of our own indicators offered to anyone interested in tuning in!
RBP Initiative 2
What It Is: Market Indicator Recap
What It Looks Like: We are quant dorks who utilize a complex series of code to develop stock market trading indicators. So rather than hide behind vague bullet points about why we made portfolio changes, we take a different approach. We just show you!
We examine the different indicators used in our own money management process and what triggered changes, being sure to include the pros and cons of each system and how they combine to illuminate a path forward. We have found that these uncorrelated systems give us a more complete view of what is happening.
So many other reporting fund managers try to find that one single indicator that is going to be correct 95% of the time, set it, and forget it. But here’s some breaking news: a single indicator doesn’t exist and no market—bull or bear—is the same. We strongly believe we must vary the systems we use and adapt how we use them together to really get a clear picture of the current state of affairs. We have to mine data from multiple sources to use and test to determine the best course of action.
This video review is clean, concise, and a no BS approach to content production.
Our Mantra: transparency in everything.
RBP Initiative 3
What It Is: Who Charted?
What It Looks Like: Imagine us sitting together at a trading desk chatting about the latest in market trends and behavior. Now imagine pulling up a seat and listening in. Now imagine we have to do six charts in six minutes… because that’s what this video is all about.
Every two week’s we’ll sit down with six of the most relevant charts and have a good, old-fashioned trader desk conversation about what we can glean from the data. What should investors be paying attention to? Where are we seeing any odd or unusual activity in the economy? If things are changing, what can we expect in the days, months, or years ahead?
You won’t want to miss our approach, because it is very different than others, and not just because we keep it to six minutes.
Pull Up a Seat
Research by Potomac will gather original, institutional research that not only drives our own decision-making, but also educates our clients and extended Potomac network. What we’re writing about is also what we’re personally implementing in our own money management. It doesn’t get much more transparent than that!
Without further ado, we invite you to pull up a seat and join in on the conversation.