Client Benefits for Investors
Our work enables clients to understand not just what is changing but also why change is occurring. The early awareness of change coupled with this deeper understanding provide our investor clients a competitive advantage in their decision making process.
Benefits for Investors
Evidence suggests that exceptional portfolio performance continues to be impacted by the recognition of a change dynamic and the correct identification of the impacted industries and companies.
Our Hedge Fund, Long Only, Mutual Fund and Private Equity clients understand that the early identification of inflection points, at both peaks and troughs, and their implications, can translate into new long and short investment opportunities as well as changing perspectives with current portfolio holdings.
Linking change to opportunity is the culmination of our service. We work with our investor clients to apply our intelligence to their investment decision making by providing:
- New investment themes
- Industry opportunity and risks
- Emerging industry identification
- Long and short company opportunity and risks
- Sector weightings
- Private equity portfolio company opportunity and risks
- Due diligence
Client Quote
"Inferential Focus provided me some of the most valuable and original research outside of Goldman Sachs. Their work frequently challenged conventional wisdom, encouraged me to 'think outside the box' and continually forced me to reexamine investment conclusions."
Chip Otness
Managing Director
Goldman Sachs (retired)
Client Application Examples
"How's Free? Does Free Work for You?"
February 16, 2005
The Context
The proliferation of new technologies and methods of media distribution, in the hands of the individual consumer, is allowing for cheap or free distribution of content encompassing news and entertainment. The dynamic is driving down media prices and sparking new battles over content ownership and distribution. Legacy content providers are threatened while new open-system content distributors are exposed to growing risks. Meanwhile, new networks will drive demand for new hardware while pushing some mainstream products into obsolescence.
Implications
New media channels and increased competition
- Online ads benefit
- Ad metric services benefit
- Broadband media delivery models increase Subscription newspapers decline
- Radio station ads decline
Enabling hardware and software benefit
- Audio/video peripherals benefit
- Home networking devices
- Data storage needs increase
Applications
Long the data storage industry. A list of potentially impacted companies we provided returned 60.75% in the year following our Briefing.
Short the newspaper industry. A list of potentially impacted companies we provided returned -20.75 percent in the year following our Briefing.
Short the broadcast radio industry. A list of potentially impacted companies we provided returned -21.08 in the year following our Briefing.
“Licking Wounds & Beating Chests: World War III Lessons From the Recent Conflict in Lebanon”
August 25, 2006
The Context
The 34-day war that raged between Israel and Hezbollah brought forward some intriguing examples of what happens when a twentieth-century organization (Israel’s military) meets a twenty-first-century network (Hezbollah’s fighting force). We identified three themes running through the conflict: Asymmetrical Deterrence Meets Asymmetrical Warfare; Powerful Technology Meets Networked Technology; and Goliath’s Forced March Meets David’s Public Information Officer. Through these themes, we discovered eight critical lessons from the realities of permeable borders (WWIII).
Implications
Warfare was evolving and new practices needed networked communications.
A shift in military focus from “overwhelming force” to intelligence gathering, surveillance and reconnaissance was under way.
- Increase in the use of unmanned aerial vehicles (UAV) and components
- Real-time battlefield-technology needs increase
Greater focus on digital, networked components
- Cyberwarfare offense and defense
- Communications monitoring
- Signal and data processing
Applications
Long UAVs and components. A list of potentially impacted companies we provided returned 123.65% in the two years following our Briefing.
Long cyberwarfare companies. A list of potentially impacted companies we provided returned 118.14% percent in the two years following our Briefing.
The S&P 500 returned -2.18 during the same period.
“Running on Empty: Global Water Shortages"
Fourth Quarter, 2006
The Context
After initially discussing the increasing strains on global water supply and quality with clients in 2002, we returned to the topic in 2006. Throughout 2006, we cited the increasing stress on natural resources worldwide, specifically on oil and water. While oil shortages received more attention, the lack of water, in terms of both infrastructure and cleanliness, had become a global issue, made more critical, in many regions of the world by climate problems.
Implications
- Irrigation technology
- Soil sensors
- Yield optimization
- Water flow monitors
- Desalination
- Wastewater
- Disinfection treatment
- Monitoring and recycling
- Metering
- Rainwater harvesting
Applications
- Lindsay Corporation, irrigation, + 42%
- Layne Christensen, water treatment, + 65%
- Itron, smart metering, + 63%
- Nalco Holding, water services, + 53%
