Synthesizers Win

“We are drowning in information, while starving for wisdom. The world henceforth will be run by synthesizers, people able to put together the right information at the right time, think critically about it, and make important choices wisely.”

– Edward O. Wilson

It is mind-blowing to think about how much information is available now versus 20 years ago, or even just 5 years ago. And yet part of the problem is a data deluge. It is incredibly tempting to be distracted by useless information… or to pay undue attention to the wrong information… or to self-select news sources and get trapped in an echo chamber… the potential pitfalls go on and on.

As the flow and volume of information increases, the ability to parse and sort that information becomes an ever more valuable skill. There are parallels here to the way grandmaster chess players process chessboard information versus amateurs. While the amateur has to painstakingly work through a complex situation — analyzing, say, ten different possibilities in detail — the grandmaster uses a process called “chunking” to reference a library of patterns in his head, then immediately zeroes in on the one or two pattern matches that are relevant.

This creates both a speed advantage and a depth of analysis advantage: Having cut away the subpar lines of play more quickly, the grandmaster can either move more quickly (saving time and energy) or invest a savings of time and energy in deeper, more nuanced analysis of the two moves that matter. The natural synthesis process increases speed, accuracy, and efficiency simultaneously, thus allowing for compound investment of the surplus.

An accumulation of small advantages in the information processing space can strengthen and reinforce itself, in small subtle ways, until finally becoming indomitable. The ability to put together “the right information at the right time,” thus allowing the ability to act with conviction before a window of opportunity closes, is in some ways the essence of trading.

What are you doing to enhance your “synthesizer” skills? Are you distracted by low-value information, or focused on high-value information? Do your data streams drown you… or act as a rich source of nourishment? Do you have a reliable means of strengthening conviction — or diluting pre-existing conviction as appropriate — based on what the information flow tells you?

I talk about the exact process we at MO use to separate the wheat from chaff in this short video I put together, which you can watch here. I cover a number of important concepts, most of which I haven’t seen discussed anywhere else. Now, more than ever, it’s critical to have a process for bypassing the noise and getting to the signal. Give the video a watch if you want to learn exactly how we do that.

Related Posts

Subscribe To Our Newsletter

Brandon Beylo

Value Investor

Brandon has been a professional investor focusing on value for over 13 years, spending his time in small to micro-cap companies, spin-offs, SPACs, and deep value liquidation situations. Over time, he’s developed a deeper understanding for what deep-value investing actually means, and refined his philosophy to include any business trading at a wild discount to what he thinks its worth in 3-5 years.

Brandon has a tenacious passion for investing, broad-based learning, and business. He previously worked for several leading investment firms before joining the team at Macro Ops. He lives by the famous Munger mantra of trying to get a little smarter each day.

AK

Investing & Personal Finance

AK is the founder of Macro Ops and the host of Fallible.

He started out in corporate economics for a Fortune 50 company before moving to a long/short equity investment firm.

With Macro Ops focused primarily on institutional clients, AK moved to servicing new investors just starting their journey. He takes the professional research and education produced at Macro Ops and breaks it down for beginners. The goal is to help clients find the best solution for their investing needs through effective education.

Tyler Kling

Volatility & Options Trader

Former trade desk manager at $100+ million family office where he oversaw multiple traders and helped develop cutting edge quantitative strategies in the derivatives market.

He worked as a consultant to the family office’s in-house fund of funds in the areas of portfolio manager evaluation and capital allocation.

Certified in Quantitative Finance from the Fitch Learning Center in London, England where he studied under famous quants such as Paul Wilmott.

Alex Barrow

Macro Trader

Founder and head macro trader at Macro Ops. Alex joined the US Marine Corps on his 18th birthday just one month after the 9/11 terrorist attacks. He subsequently spent a decade in the military. Serving in various capacities from scout sniper to interrogator and counterintelligence specialist. Following his military service, he worked as a contract intelligence professional for a number of US agencies (from the DIA to FBI) with a focus on counterintelligence and terrorist financing. He also spent time consulting for a tech company that specialized in building analytic software for finance and intelligence analysis.

After leaving the field of intelligence he went to work at a global macro hedge fund. He’s been professionally involved in markets since 2005, has consulted with a number of the leading names in the hedge fund space, and now manages his own family office while running Macro Ops. He’s published over 300 white papers on complex financial and macroeconomic topics, writes regularly about investment/market trends, and frequently speaks at conferences on trading and investing.

Macro Ops is a market research firm geared toward professional and experienced retail traders and investors. Macro Ops’ research has been featured in Forbes, Marketwatch, Business Insider, and Real Vision as well as a number of other leading publications.

You can find out more about Alex on his LinkedIn account here and also find him on Twitter where he frequently shares his market research.