Quandl Resource Hub – Alternative Data Sources
We’ve barely scratched the surface of potential alternative data sources. The data sources that will become available in the next decade dwarf what we have access to right now. The Internet of Things (IoT) will incorporate sensors that are orders of magnitude more granular, and orders of magnitude more broadly dispersed, than our current smart phone network. Drones and micro-satellites will provide real-time physical and logistical data far more detailed than our current coverage. Beacons and embedded chips inside products will allow instantaneous knowledge of transactions, usage, obsolescence and more. And companies will evolve to make use of all this data. Today, for every Amazon or Target that runs a rigorous program of data collection, analysis and action, there are dozens of companies that still operate by old-school rules. As time goes by, these firms will either adapt, or die. Either way, the future belongs to businesses that embrace the data revolution. Which means that the amount of business data available to analysts will only continue to grow. But as new data becomes available, “old” data will become commonplace. This is inevitable; and analysts must prepare for this eventuality. The Spectrum of Diffusion for Alternative Data. Data has a natural lifecycle. Newly discovered datasets are rare, jealously guarded, and valuable because they contain alpha. As time goes by, this data diffuses to a wider audience, and its alpha content diminishes; nonetheless analysts continue to use the data because not doing so would leave them at an information disadvantage. Finally, the data becomes old and obsolete: fully priced in by a market that has moved on to the next source of edge. Smart analysts are aware of this dynamic, and are always ready to adapt. They’ve internalized where we are on the spectrum of diffusion. Download the Spectrum of Diffusion Infographic by clicking here. This will be added to Business Intelligence Resources Subject Tracer™. This will be added to Finance Resources Subject Tracer™. This will be added to Financial Sources for the Family Office white paper.