THE NUMBERS GAME (PART 1)



Udit Garg

Published on 13/01/2017 12:00 AM

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DistrictD is about fostering and developing upon new ideas and thoughts and then debating on them. As such the investor community has always been a chatty lot, any information or idea travels through the community like wildfire. Qualitative information, snippets, management talks etc play an important role in defining how the markets behave and what is being bought or sold. However the underlying key aspect that eventually drives everything in markets are HARD NUMBERS.

The underlying aspect that eventually drives markets are HARD NUMBERS

Markets are eventually driven by numbers and this is where sophisticated investors excel. They are able to gauge/estimate/forecast them better than the rest. Investors tend to more often than not back their investment decisions based on what they sense of the future profitability of a company, valuations and risk-reward. All of these require a systematic way to estimate them and compare with what the market is already factoring in.

Despite it being critical to decision making, lots of investors (esp. retail ones) shun away from it. Understanding, analyzing and playing with numbers is hard and extremely complicated. More often than not, most investors tend to drop off the process at the first step itself.

The first step to analyzing numbers is data gathering. Data collection is a tedious job. As an investor it is not just about gathering the historical performance, it is also picking up data on current prevailing conditions, expectations of the future from various sources, comparing with other players geographically etc. This itself can be a daunting and an unending task. Where does one stop itself can be a valuable decision to be made. Can we create a platform that solves this big problem?

DistrictD as a platform aims to build a single platform that starts from where existing platforms such as Bloomberg stop. DistrictD aims to work with an aggregate level of user generated data. Given that it is a collection of tools, it can capture granular information on market expectations, user trends, comparisons with peers etc and also any specific information that they upload on the platform. This is one place where users can collect all their data, information in one place in a secure manner, share the bits that they want, discuss with others to gather more data.

A place for historical and forward numbers; qualitative and factual information; true market expectations. No more would investors need to maintain bulky excel files/models to keep a track of past performance and store expectations of future performance. No more will they have to hunt around to find what the market is already factoring in. To the uninitiated investor, this a community that provides the first few levels of information that they require.

“At what point does the information gathering stop?” is the ART

As I say “At what point does the information gathering stop?” is the ART part of investing – as someone says too much of it can also be harmful. However DistrictD will answer “Where to start with your information gathering?”. When to stop is upto the investor.

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