Overview
After developing a fundamental thesis, we often found ourselves asking, “Where are we in the current macroeconomic cycle? How do we measure the impact that setup has at the individual stock level?” From these questions and likely other frustrations that many share, we developed our proprietary algorithmic stock screener, known as the #MicroQuads.
For us, the MicroQuads are a way to eliminate the factor analysis part of investment research that is not where our strength likes (and, you don't pay us for). Given that we are neither quantitative or high-frequency algorithmic traders, we needed to develop a method that translated this impact into a quantifiable, measurable, and effective data point.
The MicroQuad framework seems to be the best method for doing just that, as it holds up best against all else we have seen or considered. Based on 5 years of data, the MicroQuads give us the best signals on expected outcomes, so we use it to inform our workflow and decisions. Tune in to the replay (originally aired December 30, 2020 @ 2pm ET) for a brief explanation of our process and potential ways this tool can be useful as a part of your process!
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Health Care Replay | Process & Utility of the Hedgeye Health Care #MicroQuads Originally aired on Wednesday, December 30th, 2020 @ 2 PM ET Healthcare Subscribers: CLICK HERE for event replays (includes video/audio replays & materials link) https://app.hedgeye.com/feed_items/93275?with_category=7-healthcare |
Timestamps
00:00 - Introduction
00:52 - Background/Overview: Why we started the MicroQuads (complement to fundamentals)
03:30 - Fundamentals vs. Quantitative
04:15 - MicroQuad Basics: The Sign Curve & Model vs. Actual Performance
08:15 - How it works for a stock (ILMN): Slope and Acceleration (first and second derivative)
09:40 - Performance by MicroQuad
11:20 - Average Performance & Event Frequency
13:50 - Where it gets more interesting: Macro + MicroQuads
17:00 - The Process: Weekly updates, standardized data
18:35 - XLV Case Study
20:45 - Prospective Performance
21:30 - Current MicroQuads (as of 12/28 Position Monitor Update)
Performance and Event Frequency
MicroQuad + MacroQuad Portfolio
Position Monitor, XLV, and Screen
All data available upon request. Please reach out to with any inquiries.
Thomas Tobin
Managing Director
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