If You Had Everything Computationally, Where Would You Put It, Financially?

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Technology has transformed investment and trading over the past 30 years. Markets have become computer networks, brokers are disintermediated by direct access and algo trading. Reporters are disintermediated when investors have access to primary sources at the same time they do. An ever larger view of exploitable economic and business activity can found on the web. Alpha innovators with the right technology are positioned to access, analyze, and act on this information. Dr. Leinweber, a founder of one of the earliest successful algo trading firms (acquired by ITG in 1992), manager of a $6 billion quantitative institutional global equity portfolio (at First Quadrant), founder of a pioneering web information firm (pre bubblle) and a visiting faculty member in economics at Caltech (post bubble), brings an unusually broad and deep view to these issues, from both a sell- and buy-side perspective.

Photo of David Leinweber

David Leinweber

Haas School of Business at UC Berkeley

Financial markets have been continuously transformed by technology. This has been occurring for hundreds of years, and continues today. David Leinweber’s professional interests focus on how modern information technologies are best applied in trading and investing. As the founder of two financial technology companies, and a quantitative investment manager he is an active participant in today’s transformation of markets

Clients at his consulting and software development business include some of the world’s largest investment managers and hedge funds. These tasks involve trading systems and automated analysis of textual and Internet information sources. All build on his history of innovation in financial technology.

At the RAND Corporation, he directed research on real-time applications of artificial intelligence that led to the founding of Integrated Analytics Corporation. IAC was acquired by the Investment Technology Group, (NYSE:ITG) and, with the addition of electronic order execution, its product became QuantEx, an electronic execution system still in use for millions of institutional equity transactions daily. Large institutions concerned with controlling transactions costs and proprietary traders found them particularly valuable.

As Managing Director at First Quadrant, he was responsible for institutional quantitative global equity portfolios totaling $6 billion. These long and market neutral strategies utilized a wide range of computerized techniques for stock selection and efficient trading.

Quantitative investing is driven by electronic information, and the Internet dramatically transformed the financial information landscape. This led to the founding of Codexa Corporation, a Net based information collection, aggregation and filtering service for institutional investors and traders. The company’s clients included many of the world’s largest brokerage and investment firms.

As a visiting faculty member at Caltech, Leinweber’ worked on practical applications of ideas at the juncture of technology and finance. He is a collaborator in the Harvard Business School’s e-Information project.
Dr. Leinweber has advanced the state of the art in the application of information technology in both the sell-side world of trading and the buy-side world of quantitative investment. He’s published and spoken widely in both fields. He’s gone five rounds against the Wall Street Journal dartboard.

He is an advisor to investment firms, stock exchanges, brokerages, and technology firms in areas related to financial markets , and a frequent speaker and author on these subjects. His book, “Nerds on Wall Street: Wired Markets in a Wired World” will be published by Wiley in 2008

In his misspent youth, he graduated from MIT, in physics and computer science where he was one of the first 5000 people on the Internet. That was when it was called the ARPAnet and wasn’t cool. He also has a Ph.D. in Applied Mathematics from Harvard. But on a good day, it’s hard to tell.

See also: http://nerdsonwallstreet.typepad.com/


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