100 SQUARED

All speculative financial trading hinges on prediction. Predicting price, time, derivatives of their mathematical relationships, or even sure-fire arbitrage, predicting that certain market anomalies will hold; there’s no escaping the need to see into the future.

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The trouble is, in increasingly complex and interlinked financial markets, explaining what happened today is difficult enough - let alone what might happen tomorrow. Every day, thousands of analysts describe events as simple cause and effect; X went up on the back of good news, Y sunk on the back of bad and yet the reality rarely matches this pristine logic.

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Markets rise and fall for multitudes of reasons, many of which are only explained way after the fact. Witness the financial crisis that the mainstream failed to predict, the unexpected stability of the euro during Greek economic crisis, or the FTSE 100s current cheap money boom, predicted to crash by many hedge funds currently licking their wounds.

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Faced with such impossibilities, newer, fresher forms of investment start to seem more appealing. The spiralling complexity of exotic derivatives has lost its sheen and has now been replaced with the spiralling technological arms race of high frequency trading. But the shelf life of such strategies is getting shorter while the true entry cost grows daily, and now runs into the millions.

 

So what’s next? What’s new in the race for alpha? What’s the latest, greatest idea to hit the investment world?

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Or maybe the best ideas are simply old ideas, waiting to be rediscovered.

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The strategy at 100 Squared, like the logo, is based on some of the oldest texts in existence. The only constant in financial markets is our collective behaviour, our collective capacity to race into a boom and fall into bust across every market, across every timeframe. These cycles of optimism and pessimism have been studied for thousands of years but in the face of a virtually endless stream of books, papers, traders and ideas, only one guiding principle holds fast - go to the original source.

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It's from these original sources that you can discover the constants of behaviour, and these constants are the bedrock of our strategy at 100 Squared.

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There's nothing new under the sun, it's true. At 100 Squared, our skill is in capitalising on what has been hiding in plain sight all along. 

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