Running Alpha Discovers a New Source of Alpha: Bottom-Down Intelligence for Capturing Higher Order Variables that lead to Market State/Regime Changes

Successful Investing is not just about Finding the Next Great Idea; it’s about:

Looking For a Place Where Your Best Trading Concepts and Insights Can Spring To Life;

Enabling You To Make Entry, Exit, and Trade Management Decisions with Ice in Your Veins.

Out of the need for helping the Founder address these challenges and embrace this trusted wisdom,

Running Alpha’s Idea Grid was born:

A simple, low maintenance, all-in-one mobile-responsive heat map display for the busy executive on the go; designed for visually exploring, prioritizing, and tracking today’s freshest pipe-line of actionable opportunities, all while raising your capital and strategy efficiency, through assisting you at quickly navigating around value traps in search of best expressing your favorite investable ideas.

Although putting all your eggs in one basket may sound risky, the sheer size and range of high-conviction opportunities to choose from on the Grid gives you the much needed flexibility and peace of mind for customizing and adjusting the size of your basket; breaking you free of capacity constraints and assisting you at accommodating changing volatility conditions.

Efrem is now mobilizing his vision for making the benefits of emerging data science technologies accessible to the everyday investor, for establishing RunningAlpha.com as the premier on-line destination for alpha-idea generation; designed for shock-proofing your portfolio strategy from market noise — while keeping you focused on the right side of key support & resistance levels.

That means eliminating your blind-spots, and making it a snap for converting your pain-points into opportunity; thereby, keeping your wallet closer to your hip and on a competitive playing field with institutional traders.

Tapping into this collective intelligence, Efrem is passionate about rigorously and routinely stress-testing his research framework in the midst of financial hurricanes in equity, commodity, and currency markets; successfully warning investors of the demise of WorldCom, Bear Stearns, Lehman Brothers, GM, among others, before any signs of trouble emerged. On-balance, a review of the much more mixed market settings, scrolling back as far as 400 years across world capital markets, shows similar predictive intelligence.

With uncanny accuracy and specificity, his market calls were also used to help financial traders and investors successfully prepare ahead of the Dot.Com Bust, 2005-07 USA Housing Crash, and the great recession of 2008-09, as well as the subsequent re-acceleration of growth ( later forecasted in 2013 ), that continues to fuel 2016's USA-focused market rally and global leadership.

Most notable among his Time Mapping Precasts of Wild Sentiment Jet-Stream Behavior, was the Flash Crash of May 6th, 2010; telegraphing in magnitude over two months in advance, and striking inside the exact hourly timing window of the anticipated peak tail-risk threat.

One research group inside Running Alpha, known as the Big-Data and Human-Machine Decision Sciences Network, is tasked with the challenge of mathematically sniffing out digital records of market data to look for deep structure that explain the HOW and the WHY of the market’s human social wiring, and specifically quantifying how and when traders — both human and machine — with different market perceptions and time horizons are plugging into the global grid of fear and greed.

Efrem calls this new analytics philosophy, ‘Bottom-Down Intelligence’ – first drilling down to the very first and smallest scale transaction of an individual security, and then digging deeper into:

(i) the underlying motivations and market ecology that are driving trading decisions; and

(ii) the physics of crowd-sourcing multi-speed investor interactions ( Crowd-Physics 2.0 ), that are shaping collective perceptions and interfering with observation measurement of market rhythms, across wide-ranging groups of market securities.

Going beyond conventional behavioral finance strategy that treats emotional biases as the key alpha-generating inefficiencies, Bottom-Down Analytics now makes it possible to unlock a much more fundamental and root source of Alpha, namely: exploiting social intelligence via analyzing trader ecology — knowledge of subtle self-ordered arrangements and relative differences and similarities in the sentiment measurement biases perceived by market observers.

All of us have known traders who become so locked in their views that they stop seeing and responding to what markets are actually doing. Although this may masquerade as “conviction,” it is actually socially unintelligent — not unlike harping on a topic in a conversation and alienating listeners.

Going back to basics — Research shows that we frequently make reference to market sentiment and changes in market character, much as we would speak of another person.

Running Alpha’s Time Maps of the Forward Sentiment Jet-Stream is all about enhancing your Social Trading IQ and leveraging your skills at reading and responding to actions and emotions from the eyes of your competitors; and knowing how to combine this mash-up of market insight for shining a light on the best ideas from among the background noise of what individuals and players around the table think: what they fear, want, value and are willing to bet on. “What results is a truth greater than one man’s opinion.”

Unlike traditional crowd-sourcing  and collaborative intelligent systems that focus on interacting with others to harness the collective wisdom of the crowd for generating new and better trading ideas, we apply a counter-intuitive version of crowd-sourcing. How? By peering into the mind-space and perception fields of decision makers, we can unlock the sum non-linear biases and mis-perceptions of the crowd: measurement errors of the total decision-making audience — not just those in the market today, but spanning the decision-making strategy variants that are accessible based on the myriad of ways trends can be observed and measured in the forward versions of today’s marketplace reality.

Whereas traditional Crowd-Sourcing and Prediction Markets need non-gamed information, acquired from locally informed sources, to aggregate as a prerequisite for predicting accurately, Crowd Physics 2.0 is not off-limits to seeing how the web of communication among market players, with limited insights into future events, would respond in the marketplace from the vantage points of their aggregate perception biases.

Embracing this New Standard of Social Intelligence — for Curating Perceptions and Behavioral Experiences from Forward Versions of the Marketplace Ecology to Fit the Local Needs of Today’s Decision-Making Audience — Running Alpha Adds New Context to Crowd-Sourcing; Launching the New Revolution of “Future-Sourcing.”

To analyze, and add meaning and sensibility to this special configuration of market observations, Efrem has formalized a new geometric object, that can now, for the first time, be overlaid on a standard price chart, for putting boundaries around future events, with particular application for helping decision-makers build strategic plans that offer more options for exploiting fat-tailed opportunities in the final moments of decision-making.

How? — By tracing out the sum non-linear-effect of the future Jet-Stream Behaviors of Investor Sentiment Biases, that are simultaneously driving forward price momentum and volatility changes over a broad spectrum of time-lines. The price and time coordinates that house this future shape of market space is nature’s way of efficiently encoding and revealing all relevant information about how different market participants are absorbing and reacting to both new events, as well as their own complex web of open-market transaction activities.

This is important because it opens new ground in economic and financial forecasting, for capturing early insights into critical states that lead to more dramatic expressions of sensitive dependence on initial and evolving conditions — deterministic chaos in scientific parlance.

Although many of today’s leading market research platforms focus on generating heat-maps that give you a global view of tick-by-tick changes in stock market performance indices, they fall short on: (i) delivering an unambiguous forward-looking message; and (ii) offering clues into the evolution of component-level returns, and showing how their cross-correlation among component combinations change over time.

What makes Running Alpha’s Heat Mapping technology different, lies in its usage of a universal mapping function for calibrating heat levels to the shape of these forward Sentiment Jet-Stream Biases; thereby, enabling investors to make consistent apples to-apples comparisons of forward performance and diversification efficiency among component securities.

During those forward intervals when the shape and orientation of the Sentiment Jet-Stream patterns of two or more portfolio components become more tightly coupled, they are said to exhibit an increasing bias for future correlation. For maximum diversification benefits, securities with non-overlapping Jet-Streams should be selected first.

Access to Micro ( weekly horizon ) and Macro Maps ( monthly horizons ), displaying these Sentiment Jet-Stream formations over weekly and monthly intervals, are premium features made available, upon request, for each portfolio component in Running Alpha’s flagship offering of Alpha Ideas: the Grid 100 and Focus 15 service plans.

To advance these capabilities and convert information uncertainty into meaningful intelligence that you can tactically and strategically act on, Running Alpha’s founder, Efrem Hoffman, has invested nearly two decades combining two analytic technologies — Crowd Physics and Quantum Encryption — that have never been mixed before in just the right proportions for illuminating insights into human perceptions yet to be revealed to the world of social media and the marketplace at large.

This is a game changer because traditional media sources can only access visible data — those insights and questions that people have chosen to share with the public.

In pursuit of true north investment outcomes that shrink your emotional footprint on your P&L, Running Alpha is on a mission to leverage these insights for helping you decipher when markets will be climbing the great “wall of worry” or descending a steep “slope of hope.”

To this end, Running Alpha’s insights-building platform has been applied successfully for helping private equity investors and financial & commodity market traders thrive into today’s marketplace, and better navigate around market noise and volatility storms — erupting in the Energy, Currency, and Global Equity Markets.

To give you a glimpse of what it’s like to see through Running Alpha’s window into the future, here are a few epic watershed events that matched up squarely with our actionable research guidance.

These include the anticipated magnitude and duration of market activity surrounding the 2008 Mortgage Meltdown, the May 2010 Flash Crash, and recent Crude Oil Crash and US Dollar Meltup; all identified week’s to month’s in advance with high specificity —

revealing early insights that plugged our clients into the quiet and subtle moments of decision-making leading up to crisis and opportunity during these fearful and greedy episodes of mass panic and mania.

What is most actionable about this intelligence is that this new class of insights are discoverable before asset prices initiate their descent / rally from market peaks / troughs; and even before smart money influencers start expressing unusual patterns of trade activity.

That means, as a subscriber, you will find that a large percentage of highly ranked security components on the Grid simultaneously make frequent and persistent appearances on the top performers and unusually active list, across multiple time scales from intra-day, daily, weekly and monthly investment horizons. At the epicenter of Merger and Acquisition ( M&A ) activity, on many occasions, these opportunities turn into successful take-out candidates with premium valuation recognition.

The technology is also being deployed for exploiting information inefficiencies that arise when agencies and market participants do not accurately factor in the potential collateral damage that inappropriate timing of IPO releases, corporate, financial, and economic announcements have on the forward sentiment structure of market prices and social media activity.

In this new season of change, Running Alpha is amping up its ongoing scientific investigations into the most elemental themes of human market perception dynamics, namely, personal influence and salience of the decision-making stakeholders, diffusion and viral propagation of information, and the architecture of human and machine perceptions and observation paradigms -- that not only telegraph market contagion, but define it; as well as the changing shapes and sizes of social & investor sentiment feedback networks, which gives rise to these attributes. To this end, Efrem’s weapons of analysis have found their home at the intersection of where first principles of Quantum Physics meets the Mathematical of Social Interaction.

Having been:

a guest speaker on Artificial Intelligent  ( AI ) Design and 3D Interactive Visual Decision Support ( VDS ) Applications for trade management in the Spring of 1997, as well as an active participant at an elite private trading tutorial series in Houston, Texas, run by a 36+ year veteran trader and professional behavioral trading psychology coach — instrumental in successfully transforming the science of chaos theory into practice in a live trading room,

Efrem Hoffman, CEO and Founding Platform Architect was:

(i)  discovered at this tutorial by a prominent and extra-ordinarily profitable ex-Chicago floor trading professional in the S&P & Treasury Bond Futures Pits, and later invited to serve as his apprentice in the late 90s — applying unique quant strategies & software design insights in exchange for professional real-life trading instruction on exploiting the inter-market trading book relationships that drive successful speculation in Futures, Equity & Currency Option Arbitrage markets; and

(ii)  later introduced in 1998 — by another member of the tutorial — to a celebrity physicist who: (a) won the overall People’s Choice Award at the 1993 Windows World Open, earning a nomination by Microsoft for the Smithsonian Award, after making courtroom history — by developing the first computer model that generated new evidence for a successful defense in a high-profile criminal trial; and (b) studied under the inventor of BASIC computer language, Dr. John Kemeny, and Dr. Winterberg, a student of Albert Einstein and Heisenberg, respectively; and (c) periodically served as Efrem’s trusted software design and numerical modeling mentor and scientific colleague from 1998 to 2005.

Entrusting these experiences with passion and dedication for helping people connect the dots and think through alternative solutions, Efrem makes it his business each and every day to launch deep theory into live trading practice.

In the spirit of the former Hedge Fund Superstar, Curtis Macnuyen, Efrem is passionately absorbed in putting his Running Alpha Intelligence Engine to work for you in:

“Finding Truly Epic Trading Setups, Where You Have To Be a Little Bit Right To Make A Lot Of Money And A Lot Wrong To Lose A Little Bit Of Money.”

Well connected to the Bay Street Community in Toronto, Canada, Efrem regularly provides active research counsel to boutique portfolio managers and preeminent independent value-oriented investment research firms that are grounded in deep physics and forensic analysis of balance sheet valuations. Combined with expanding international interests from wealth management practitioners outside of Canada, Efrem’s contributions and networking opportunities in the quantitative financial services sector are building on his 18+ years of enterprising knowledge in the domain of Mathematical Physics, Behavioral Finance, and Quantum Decision-Making.

Efrem hopes that with his company, he can play an inspirational role in helping investors and business executives have pain-free experiences on their journey toward better decision-making.

His vision is to see Running Alpha as a leading part of a story for rethinking the way we can collaborate with nature, to better exploit uncertainty, and compensate for the human condition and machine biases that get in our way of both perceiving world events in high-definition and making bold decisions with attention to detail.

When Efrem is resetting his trading psyche for the next day’s Battle for Investment Survival,” he shares his time between letting off steam at the gym and Varsity track, and celebrating his life with his best friend — and wife of 3+ years.

The Bottom Line to Efrem’s On Going Research is:

The events we perceive as ordinary every-day occurrences are actually born out of the background noise of prior crisis and unusual market aberrations.

Thus by focusing on the rare 1% Outliers rather than eliminating them, the agenda is to gain clarity on the 99% of market pressures that influence decisions each trading day!

New Perceived Risk & Capital Asset Valuation Framework, founded on Leadership Rotation of Asset Class Rankings delivers:

Portable, Low-Cost Tail-Risk Solutions for Professional Managers looking to

“Hedge-For-A-Profit” in All-Volatility Environments with Absolute Alpha.