The chapter explores the origins and methodology of variant perception, emphasizing the importance of building leading indicators to identify trading opportunities based on deviations from market expectations. It delves into forecasting economic indicators like building permits and the yield curve, highlighting the significance of liquidity indicators and asymmetries in market pricing to help clients make profitable decisions and protect against downside risks. Examples are provided on how leading indicators offer early signals on market movements, and the importance of utilizing research for different types of funds and strategies in the investment field is discussed.
Jonathan Tepper is the founder of Variant Perception, an economic research group that works with institutional managers, hedge funds, and allocators to provide objective and comprehensive data to form actionable ideas from leading indicators and emerging trends. He is also the author of three books, the most recent of which, The Myth of Capitalism: Monopolies and the Death of Competition, received widespread acclaim earlier this year. Our conversation covers Jonathan's unusual upbringing, learning about currencies from Big Macs, building economic and liquidity forecasting models, and catering Variant Perception's research to investors. We then turn to The Myth of Capitalism, discussing the history, causes, and ramifications of the absence of competition in U.S. industries, natural and unnatural monopolies, examples in the tech giants, funeral home operators, airports, and hospitals, and what can be done to counter this negative trend.
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