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Consumer-grade apps don’t work for equity analysts

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By Alap Shah, Co-Founder and CEO of Sentieo – Investment analysts, by and large, are a pretty smart group. If they can find a better way to do their job, they will. So it’s no surprise that an industry that relies so heavily on information has adopted a number of consumer-grade apps to enhance their workflow. And while better than nothing, this practice can create more problems than it tries to solve.

In the analyst community, note-taking apps such as Evernote and OneNote now often serve as the foundation for the research process, in spite of the fact that neither were designed with analysts in mind. Why are these solutions being adopted? First, they are mostly an improvement over the ubiquitous network and folder structure. Second, they are fairly cheap and easy to use. But perhaps most importantly, they bypass internal IT operations that would otherwise express security concerns with such apps. While these solutions do offer an improvement over a network and folder topography, many times they are more like putting square pegs in to a round hole – they might fit, but you’re going to have to smash them in there pretty hard.

On the surface, consumer note-taking applications appear to be a good fit to manage the enormous amount of information—broker research, news, internal notes, SEC filings, call transcripts, etc.—that forms the basis of the fundamental research process. However, there are a number of instances where these generic apps fall short, and, ultimately, inject more problems into the research process than they solve.


Generic note-taking apps and investment research platforms both allow you to add content to their platforms from a variety of methods: web clipper, cut and paste and email forwarding for example. However, given the enormous amount of information that needs to be captured from a variety of sources and formats, using a system that comes pre-loaded with the most relevant content can significantly shorten the investment decision-making process, not by hours, but by days. Switching back and forth between content sources – SEC filings, broker research, transcripts, company presentations—is a significant waste of time and effort by an investment team member who’s skill set is best used to analyze and interpret information, not manage it. 

Beyond qualitative content, embedded accessibility to quantitative information, like prices, financials, industry statistics, and trends, is an important component to maintain a holistic view of one’s investment thesis. This is a critical feature which no generic note app will ever be able to provide. In fact, most investment research platforms don’t provide it either. They’re simply empty shells that require the user to go through the painful process of populating the database themselves.  Platforms like ours, on the other hand, offer a full set of documents, news and research – already populated – while also providing the data and analytics that, together, form a singular investment research platform.


One of the most glaring deficiencies in consumer grade apps is the lack of enterprise-level security. Considering the importance of the intellectual property of the investment team, understanding these shortcomings is of paramount importance. Evernote, for instance, is based on a multi-tenant configuration and uses standard AES-128 bit encryption. Given the sensitivity of research information, analysts need a higher encryption protocol, along with options for single-tenant and a virtual private cloud offering. Indeed, these configurable options allow for the security equivalent of an on-premise solution along with the cost and maintenance benefits of a cloud solution. 

Last, but not least, management and compliance should have access to any and all information across the entire research platform via an administrative login or dashboard.  Because consumer-grade apps are not meant to house sensitive intellectual property, important compliance functions like this are not available.


In an investment team environment, it’s important to recognize the power of the collective intellectual capability of the team. Sharing knowledge efficiently not only increases the alpha potential, but also acts as an intellectual risk management tool. Ideas, theories and opinions can flow freely and efficiently across the entire decision-making spectrum, helping uncover ideas while avoiding landmines. However, simply sharing “notebooks,” as is the case with most note-taking apps, often creates more problems than it solves. This is because sharing large information sets requires the recipient to dig through a vast amount of information before reaching what’s most relevant. To say this is a waste of time is an understatement. A system that allows users to share specific elements within a notebook, like a chart or piece of annotated text, is immensely more efficient for everyone involved. Time, as they say, is money.


Investment management is a performance-driven business. For a fundamental research-based portfolio, overall fund performance is based on the sum of its human parts and the tools that they use. With multiple views into the research process, management can increase transparency across the organization along with oversight into analysts’ recommendations. What is really needed, then, is a system that can easily record and highlight the decision-making process. In this way, the PM or Head of Research can quickly and easily ‘analyse the analyst,’ validating any investment recommendations being made.

Much like their corporate counterparts, consumer-grade apps like Evernote and Microsoft’s OneNote have found their way into the information-intensive investment research process. These applications do provide a basic, albeit limited experience with which to capture, organize, and share information.  However, the process of having to “fill’ these applications with external content, poor collaboration features, and lack of enterprise-grade security features is only a small step forward compared to an investment-specific research platform like Sentieo that can move the investment process forward by leaps and bounds.


Alap Shah is Co-Founder and CEO of Sentieo, a next generation financial data platform for investment analysts. Alap leverages a decade of experience as a long-short equity PM and Analyst to help design and build tools to enhance investors' workflow and performance. Most recently, Alap was Managing Partner of Digital Investments, an equities focused family office. Previously, Alap was an Analyst in Citadel's Global Equities business and at Viking Global Investors, where he covered global consumer equities. Alap began his investing career in private equity at Castanea Partners.


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