In Greek mythology, the titan Prometheus took fire from the Gods and gave it to man, sowing the seeds for the technological advancement of the human race. Much like the titan, Prometheus Research’s objective is to empower individuals’ financial decisions through the democratization of investment research. For decades, there has been a large gap between the investment research available to institutional investors versus retail investors- a gap that we think should no longer exist. This gap is particularly evident in the macroeconomic space, with retail investors lagging far behind their institutional counterparts in terms of research.
At Prometheus, we are trying to level the playing field in macro. Moreover, we are trying to push the field of macroeconomic investment research forward. We believe that a systematic approach to economics and markets, coupled with a discretionary research overlay, is the best way to generate sustainable success. Therefore, our analysis combines the best of both worlds, leveraging the best qualities of both u201cthe machineu201d and the u201cman behind the machine.u201d Our systematic process is designed to be logical, intuitive, and iterative. Our data-driven, iterative process allows us to improve and evolve our analytical tools continuously. As a result, our research is continually expanding and improving. While we primarily cover the US, we intend to expand our analytics to other countries over time.
Our approach to investing is steeped in a deep understanding of the drivers of the macroeconomy. Over the years, we have built an extremely strong understanding of the linkages that drive the economic cycle. This understanding has been built not just through our collective experience but by exploring economic data far back in history to evaluate the persistence and pervasiveness of our understanding. We then systematize our knowledge into algorithmic, rules-based procedures to analyse economic and financial data and create portfolios. This approach of systematization allows us to track economic developments in an extremely granular and highly scalable manner. As a result, we have a daily picture of the current state of the US economy and 48 different assets.
We think that asset allocation drives the majority of portfolio returns over the long term. The most important determinant of the returns in an asset class is the macroeconomic environment. Hence, analyzing and nowcasting the state of the economy is of paramount importance. As a portfolio allocator, you need to deal with high-level macro concepts- like economic growth, inflation, and liquidity. These macro concepts are enormous in terms of the volume of information they encompass, making it exceedingly hard for investors to dissect what drives them. Yet, investors are expected to make financial decisions based on these concepts daily.
Our value proposition at Prometheus is to systematically analyze high-level macroeconomic concepts such as growth, inflation, and liquidty from the bottom-up to provide high-quality insights that can power asset allocation. We essentially do the legwork of dissecting macroeconomic drivers so that our readers don’t have to, allowing them to focus on the implications of macro moves on their asset allocation.
We think our work is particularly valuable to the retail community. There has been a proliferation of trading tools for retail investors in recent years; however, we are yet to see the expansion of the research and analytics platforms to complement these trading services. At Prometheus, we are trying to be one of the first few pushing for finance’s democratization.
Aahan Menon is the Founder of Prometheus Research. Prometheus provided elite quantitative macroeconomic research to the public. Using a data-driven process, Prometheus offers real-time insights into the evolution of markets & economy and combines these insights algorithmically to create rules-based portfolios to help guide investors to achieve equity-like returns with much lower risk. Prior to founding Prometheus, Aahan worked both in the retail research business at FXDD and on the buy-side at Light Sky Macro- bringing a well-rounded perspective to markets. Aahan has an undergraduate degree in Finance from NYUu2019s Stern School of Business.
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