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The idea behind FusionIQ conceived over a decade ago when Kevin Lane, FusionIQ's founder, had an idea: What if investors only followed objective information about stocks. Only the data points that could be shown to matter the most in regards to future equity performance?
Starting with a Bloomberg terminal and excel spreadsheets, Kevin began mathematically testing market data. Which information was the most value added in the investment process ? Which data mattered the most? What were investors religiously following that they shouldn't have been? What were they ignoring that they should have been paying attention to?
What he discovered was eye opening! The majority of information that Wall Street obsessed over, P/E ratios, management teams, channel checks and new product introductions, exceedingly seemed to be information that lagged major price moves.
This is not to say that the management team didn't matter, or that valuation was meaningless, rather he discovered was that this information simply wasn't as useful to investors as they viewed it to be. It was either too subjective or to dated to use as the basis for making investment decisions.
So Kevin began back-testing other metrics: Money Flow, the directional change in Institutional Ownership, Short Interest as a % of Float, multi-time frame trend analysis, forward earnings yield and a dozen others. What made these many of these metrics so intriguing is they all generated Alpha. Alpha of course being the excess return above the return the market generates.
For his stock picking acumen and for more notably for identifying disasters before they happened like Enron and Tyco, Kevin was named to the Business Week "Analysts who get it" all star team in 2002.
Since that time, FusionIQ has been extensively back-tested and upgraded from its early spreadsheet days. In fact the search for new alpha generating variables is an ongoing process. Getting so much useful information out of the system Kevin and his team at FusionIQ decided to share the software to the world. FusionIQ was first put on the internet in 2007, as an alpha test, and in 2008 we began beta testing. IQ is now in its 3rd generation and is capable of adding value to investors as an idea generator, a portfolio risk management tool and as an overlay strategy to anyone's investment process.
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| Protect your capital, make smarter investment decisions, and create a more sound investment process � with FusionIQ! |
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