Outlook 2018: Jared Broad, QuantConnect
Jared Broad is the founder and CEO of open-sourced algo-trading platform provider QuantConnect.
Will Wall Street return to focusing on innovation to drive alpha in 2018?
Low volatility will continue into 2018 as the Trump Tax Plan drives the growth of US equities. In order to outperform the market, active managers will need to find creative investments and techniques to justify their fund fees. This pressure will cause growth in the alternative data markets and drive more funds to automate their processes to increase their operating efficiency.
What do you expect to be the skill sets most in demand in the new year?
Driven by the need to increase efficiency, funds will continue automating their investment process, creating more demand for quantitative developers, engineers, and mathematicians. Given existing shortages in the STEM field, fund managers will need to be creative in sourcing their teams and talent. This creativity will drive more innovation in the talent acquisition process likely resulting in more hackathons, Kaggle-like competitions, and hedge funds investing in public relations and marketing.
What changes do you expect to see in artificial intelligence in 2018?
Artificial intelligence has never had so much attention and investment. It will be a blockbuster year, as think tanks invent new techniques for machine learning. Adoption of AI in consumer technology will increase, making our goods and services smarter, thanks to popular cloud providers such as Amazon and Google Compute Engine offering machine learning as a service. This will drive up revenues attributed to artificial intelligence, and this once-academic field of research will start having a widespread, measurable impact on society.
Which market structure changes should take place this year?
Cryptocurrency initial coin offerings (ICOs) represent a great opportunity for investors and entrepreneurs alike; however, the current lack of regulation and definition on their issuance will prevent them from becoming mainstream. There needs to be more reporting and controls to protect the fledgling businesses from accidentally stepping out-of-bounds; there may potentially even be a need for a central verification organization to approve the ICOs, just as exchanges approve traditional IPOs today.
New offering targets MiFID II's stringent requirements.
Middle- and back offices offer fertile ground for the technology.
Artificial intelligence set to dominate Wall Street - soon.
Technology giants with data analytics and distribution muscle may become new competition.
The strategy is based on sentiment scoring extracted from news data by AI.