Fundamental Edge

LAUNCHING ANALYST ACADEMY, OCT 19th COHORT. Hello! We are very excited to be launching our next cohort of Analyst Academy. What is Analyst Academy? A six month guided cohort of the 60+ hours of institutional training curriculum. The basic tools needed to survive & thrive on the buy-side: - How to build your investment process - How to conduct a deep dive research process - How to figure out what will move the stock - How to generate investment ideas - How to prepare for a management meeting - How to manage the deluge of information - How to develop & communicate a thesis - How to be a good buy-side analyst - How to leverage AI into your investment process (NEW, including 10+ hours of AI curriculum) - And much more In the Analyst Academy, we attempt to teach the "hedge fund equity research process" and endeavor to try to present what we think are best practices for the buy-side equity research process. We have hosted over 1,500 students from all walks of the buyside - analysts from large multi-managers, tiger style funds, long only firms, and family offices. Increasingly, Fundamental Edge is building internal training programs in partnership with Top 100 Asset Managers. Roughly 2/3 of students are already on the buyside, with the remainder working to break into the buyside. This is a rigorous, intensive curriculum - not an investing for beginners program. If you would like to learn more, you can watch our most recent info session in the comments below or visit our site fundamentedge . com to learn more

AI agents are only as good as the real-time data they reason on, and that shift is about to change how alternative data is bought, priced, and used on Wall Street. @FundamentEdge Brett Caughran sits down with @CarbonArcAI founder @MckeownKirk, who spent two decades building the primary research and data operations at Glenview and Point72 before going out on his own. Kirk walks through how credit card panels went from real alpha to expensive table stakes ("paying alpha prices for smart beta"), why he built CarbonArc around consumption pricing and MCPs that plug straight into AI agents, and how markets could trade as agents get plugged into live data. Enjoy! Timestamps: 16:34 Where Alpha Goes When Data Goes Mainstream 30:09 Why He Started CarbonArc 39:43 AI Is Only as Good as Its Inputs 40:41 Will AI Change How Markets Trade? 44:09 Can Claude Be Trained to Pick Stocks? youtube.com/watch?v=g12Z7HS5…

New on Invest with AI: Brett Caughran (@FundamentEdge) sits down with Robert Yang (@GuangyuRobert ), co-founder and CEO of Fundamental Research Labs (@Fundamental). Robert ran a computational neuroscience lab at MIT before leaving to build AI agents. FRL now builds Shortcut, an Excel agent used by buy-side analysts, and Brett is joining the team as Chief Growth Officer. Inside the episode: - 1,000 AI agents in Minecraft that organized a search party on their own - Why going viral wasn’t enough to make Shortcut work - Why hedge fund analysts, not everyday Excel users, became the core customer - The case for one agent that manages your other 50 - Why today’s models fold the moment you push back - What it takes to build an agent that holds a real investment view Watch the full episode below TIMESTAMPS [00:00] Intro [00:43] Why Robert Wanted to Build AI Before It Was Popular [08:40] Running an MIT Lab and Questioning the Work [14:05] The Agent Research That Pushed Him to Leave [19:20] Project Sid: Building a Society of 1,000 Agents [22:18] The Search Party Nobody Programmed [26:58] From Minecraft to Excel Agents for Wall Street [33:05] Going Viral Wasn’t Enough: Making Shortcut Work [37:28] Why Hedge Fund Analysts Became the Customer [41:51] From an Excel Agent to an Investment Team [45:51] Why Nobody Wants to Manage 50 Agent Threads [50:12] How Close Are We to a Digital Hedge Fund Analyst? [53:52] The Problem with AI That Always Agrees [56:50] Teaching an Agent to Hold an Investment View [1:04:29] When Analysts Start Working More Like PMs [1:06:29] Brett’s Role: Training the Digital Analyst [1:09:07] If AI Frees Up Your Time, Where Does It Go? [1:11:34] What This Means for FE and Invest with AI youtube.com/watch?v=qVPJv5ga…

When people talk about AI’s growing transformation of fundamental investing, what often comes up is how AI interfaces with models. The attached Claude skill screenshot looks like an innocuous clarifying question about a spreadsheet, but I’d argue that the screenshot is itself emblematic of fundamental investing. It is the fundamental investment analyst’s duty to triage, weigh, and decide how to triangulate what comes from the company (i.e. LT guidance), published consensus (which may cluster around the midpoint of company guidance), and individual variant view derived from front-footed research around a company’s key drivers. As the debate evolves on which elements of fundamental equity investing are best transferred to machines and which remain squarely in the purview of the irreducible human, it is fair to say that more judgment is required of junior analysts earlier on in their career than has historically been the case. I speculate that this is because most experienced analysts’ judgment and discernment came from an upbringing comprising some combination of long hours spent in transcripts and models, trial and error vs. the market, and the general osmotic learning that comes with time in a seat. With AI radically shrinking the cycle time of certain types of desk research, some fundamental analyst workflows supported by AI now yield results without sweat, output without toil, and instant black-box outputs that replace apprenticeship-style observation. Today’s analysts at the helm of AI tools risk getting dessert without dinner, the medal without the race. I know this because it is a frequent topic of discussion at our firm and from our clients’ CIOs, DoRs, and PMs. An analyst eager to get a name in the book might now uncritically forward to a PM an AI-generated emphatic and persuasive writeup generated by an LLM with no accountability is a recipe for disaster when analysts are accountable to PMs who are accountable to management who is ultimately accountable to LPs. What we used to say is that Fundamental Edge amounted to “driver’s ed for the buyside,” but the emergence of capable tools wielded responsibly has compelled us to update our priors and reimagine early-career analyst development as flight school. Analysts now sit at the helm of force-multiplier tools where missteps carry larger consequences. We must simulate difficult scenarios and install judgment earlier on to avoid disaster later. Our training must not quaintly prepare analysts for yesteryear, it must prepare them for today. That’s why we are folding AI workflows back into all of our core academies. If you’re interested, please email [email protected] to learn more. FROM THE DESK OF ANDREW CARR Fundamental Edge Instructor

AI continues to reshape the investment landscape in novel and unexpected ways, and some of the industry's leading voices are coming together to discuss what comes next. This coming Wednesday, November 4, Fundamental Edge instructor Paul Johnson hosts Fordham University's 2nd Annual AI and Value Investing Conference in NY at GSB Lincoln Center Campus in the McNally Amphitheater. The all-day event brings together CEOs, investors, and industry pioneers for a conversation on the intersection of AI and value investing. Learn more and register here: eventbrite.com/e/ai-and-valu…

“The only alpha is the stuff that's in people's heads.” — Sagar Kadakia What happens when AI can conduct 50 expert interviews in a week? @FundamentEdge Brett Caughran and @khemaridh sit down with @S_Kadakia , founder of Qualitate, to discuss how AI is changing primary research and what this means for investors. We discuss: - The future of expert networks - Scaling expert interviews with AI - Automating channel checks and primary research - Research quality, compliance, and human judgment - Whether AI will commoditize investment alpha - Where investors will find their next competitive edge As Sagar puts it, “It's ultimately what they do with that information.” Watch the full episode here: youtube.com/watch?v=rc2Io6KN…

4,000 Tokens to 1 Million: How AI Equity Research Has Changed Since 2023 @FundamentEdge Brett Caughran questioned how far AI for equity research has come in the last four year in the latest Invest with AI podcast episode. According to Alistair S. Smallwood, Head of Applied AI at Primer: “When we first started building Primer, we were dealing with large language models with context windows of 4,000 tokens. They couldn’t process PDFs. They couldn’t process charts. They couldn’t process tables. We had to build our own fully custom pipeline. We now have million token context windows, and large language models can broadly natively process charts and tables. Although they’re still nowhere near where they need to be.” Watch the full episode on our site at fundamentedge.com/invest-wit…

Where will investors find alpha in the age of AI? And what happens to human judgment as investment research becomes increasingly automated? @FundamentEdge Brett Caughran sits down with Alistair S. Smallwood, Head of Applied AI at Primer and former fundamental investor, to debate how AI is transforming equity research, hedge funds, and the future of alpha generation. Alistair spent eight years on the sell side before moving to a long/short equity fund, where he helped build AI-powered research infrastructure. Today, he leads applied AI at Primer, developing tools to automate research and identify investment signals. One surprising finding: Primer tested 550 earnings calls across five AI models. 85% were interpreted positively, despite approximately 30% of companies missing earnings. Could widespread AI adoption introduce new market biases and create opportunities for investors who know where to look? We cover: > Why fundamental investing teams may start resembling quant teams > Scaling mosaic theory across thousands of company filings > How AI biases could create new sources of alpha > AI-generated earnings forecasts as a new form of market consensus > Why traditional AI benchmarks fall short > Where human judgment still matters in investment decisions > The skills gap holding back AI adoption at hedge funds > Why autonomous investing still faces accountability challenges > How Taylor Swift distorted an alternative data signal > Why longer investment horizons may become more important Highlights: 00:00 — Introduction 00:27 — From investing to applied AI 03:08 — Evolution of AI equity research 06:54 — Building tools that survive model upgrades 08:46 — Rethinking financial models 11:50 — Scaling mosaic theory with AI 17:02 — Can AI replicate human research? 19:51 — Self-improving AI agents 22:38 — Evaluating AI research output 24:10 — Where will investors find alpha? 27:38 — AI bias in earnings analysis 30:44 — AI forecasts and market expectations 33:00 — The limitations of AI benchmarks 37:07 — Where human judgment matters 42:19 — The shift toward longer time horizons 47:02 — AI's impact on factors and risk models 48:07 — The AI skills gap at hedge funds 50:31 — Challenges of autonomous investing 56:09 — Finding alpha beyond AI answers 57:54 — Taylor Swift and alternative data 59:36 — Building and scaling Primer 1:03:36 — AI compliance and data security 1:06:58 — The future of AI adoption The bigger question isn't whether AI will transform investing. It's how investors will adapt and where they'll find their competitive edge. Watch the full conversation and explore the Invest with AI series on our website. Or watch it on our YouTube channel here: youtube.com/watch?v=T8Rj83VZ…

As AI becomes more sophisticated, where will investors find their next source of alpha? In the latest episode of Invest with AI, @FundamentEdge Brett Caughran sits down with Alistair Smallwood, Head of Applied AI at Primer, to explore how AI is reshaping fundamental investing and why human judgment may become an even more important competitive advantage. From scaling investment research to identifying new market inefficiencies, the conversation explores what happens when AI becomes a bigger part of how investors analyze companies and make decisions. The question isn't just what AI can do. It's where investors can still find an edge. Catch the full conversation and explore the rest of our Invest with AI series on our website: fundamentedge.com/invest-wit…