Pej Hamidi is the founder of Alpha Insights LLC and a co-founder of the Penseur Fund, specializing in high capacity equity portfolios that are uncorrelated to the broad benchmarks. While the majority of Pej's running models are quantitative long/short portfolios, he has agreed to share some of his ...
morePej Hamidi is the founder of Alpha Insights LLC and a co-founder of the Penseur Fund, specializing in high capacity equity portfolios that are uncorrelated to the broad benchmarks. While the majority of Pej's running models are quantitative long/short portfolios, he has agreed to share some of his best directional ideas.
As a quantitative multi-asset class trader, his research is focused on market neutral portfolio construction. Pej differentiates his style of market neutral portfolio trading from other managers claiming to be market neutral by defining market neutral as being "dollar neutral" and "beta neutral". Where most other managers are just pairing off their long and short notional exposures, and claiming to be market neutral as a result, Alpha Insights measures beta loads across all 13 S&P 500 sectors and 9 additional factors, to calculate correlations and covariance of each position relative to every other position in the portfolio. As Pej puts it, "if you're not measuring beta loads across your holdings, then you're just slapping lipstick on a beta fund and falsely claiming to be an absolute return strategy to justify higher fees. Who wants to pay an incentive fee for market beta? Maybe in the latter half of the 20th century this was reasonable, but today, I would say it's misrepresenting risk".
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Upwork: Substantial Upside Opportunity In Workforce Mobility
When $UPWK debuted back in October of last year, the shares were oversubscribed by a factor of 20x. A colleague of mine noted that "nearly every investor that met with the company on the roadshow put in an order". They are a first mover and the market opportunity is estimated to be around $560 BILLION.
One potential catalyst for the share price which has fallen off the radar since the December swoon, is their partnership with $MSFT. On Dec 7, #Microsoft announced a partnership with UPWK to launch the Microsoft 365 freelance Toolkit. "The toolkit is an integrated workforce collaboration solution that helps enterprises work with freelancers at scale and is powered by Microsoft 365 and Upwork Enterprise". This move was very much inspired by Microsoft's own initiative to embrace a flexible talent model. Microsoft launched an internal pilot program to give employees access to flexible, freelance talent. Within the past year, Microsoft completed over 2100 projects on Upwork. These projects included writing, research, video editing, translation, design and data science. This level of integration is reminiscent of the early partnership between Microsoft and LinkedIn before Microsoft acquired them.
The market opportunity for #Upwork is huge, expanding and mostly untapped. So where are the analysts? This has a great deal to do with how the investment banking model works and a little known sell-side strategy called "momentum ignition". This involves a (possibly coordinated) series of "beat and raise" actions by sell-side analysts intended to trigger a mark-up phase in the stock price following a period of accumulation for their institutional client's books. To accumulate shares, the stock needs to have unrestricted float. Their post-IPO restriction period has not ended yet. Contrary to popular belief, stocks don't necessarily go down when the IPO restriction ends.
UPWK becomes an extremely juicy takeover candidate for a company like MSFT as the latter is positioning itself to dominate the B.I. and workforce productivity markets.
The rate at which companies are shifting towards a flexible workforce is accelerating and we are in the early stages of a systemic shift that will see flexible workforce models becoming the norm.