NextGen Investing: Riding the quant stock rocket
NASA engineer Hayden Burgoyne uses quantitative analysis to identify stocks ready to blast off. Credit: Newsday/NASA
As far as Hayden Burgoyne is concerned, picking stock market winners is hardly rocket science.
And he should know. Burgoyne is a NASA engineer who spends his days plotting a mission to explore the moons of Jupiter. But at night, the 32-year-old is an amateur "quant" and part of an online community earning cryptocurrency for their stock-picking prowess.
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As far as Hayden Burgoyne is concerned, picking stock market winners is hardly rocket science.
And he should know. Burgoyne is a NASA engineer who spends his days plotting a mission to explore the moons of Jupiter. But at night, the 32-year-old is an amateur "quant" and part of an online community earning cryptocurrency for their stock-picking prowess.
Quant trading, also known as quantitative trading, uses powerful computer algorithms and complex mathematical models to crunch an enormous amount of data to find stock trading opportunities unavailable to most investors.
Burgoyne and thousands of his quant peers do their trading for Numerai, a crowdsourcing firm with big early backers in hedge fund billionaire Paul Tudor Jones and Howard Morgan, a former executive at East Setauket-based Renaissance Technologies. Renaissance is one of the giants of quant trading and its founder, James Simons, has a net worth estimated at $24 billion, making him Long Island’s richest person.
Burgoyne and the other contributors pick stocks they think will outperform in the coming month and make bets in online trading tournaments using a digital cryptocurrency issued by Numerai, which then invests in the corresponding stocks.
Users like Burgoyne parse a whole assortment of data on 5,000 stocks from price history to valuation ratios. Participants then score each security on how likely it is to outperform in the coming month, and bet on their own predictions.
The profits over the years have helped Burgoyne bankroll his wedding and honeymoon across South America, but they aren’t enough to lure him away from NASA.
"This is just a hobby that’s more lucrative than most," he said.
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