Data Without Rules
Richard Johnston@richyj_
−0.1%
since Oct 9
The idea
I believe huge data with almost no rules will shape the next couple of years more than careful reasoning, and that it will make investors overconfident, fueling more trading and more bubbles. Rather than chase the AI names already priced for perfection, I lean into the toll collectors: market makers, exchanges, brokers, and data and scoring firms that get paid whether bets win or lose. A smaller slice owns the data harvesters themselves, plus a cybersecurity holding as insurance if things break or rules arrive fast.
What it owns
- Market makers, brokers and exchanges collect fees on every trade, so more overconfident trading means more money for them whether the bets win or lose. · Robinhood MarketsIt handles trades for retail investors and earns fees through payment for order flow when trading firms pay to access customer orders., Interactive BrokersIt handles trades for active investors globally and earns interest on the cash sitting in customer accounts., Intercontinental ExchangeIt owns the New York Stock Exchange and sells market data to big players, collecting fees on both trading and data subscriptions., Virtu FinancialIt earns a small fee on each retail trade whether the buyer's bet turns out right or wrong., CME GroupIt runs the largest U.S. futures and options exchange where both speculators and hedgers must pay to trade., Nasdaq IncIt earns from listings, trading volumes and the data and software tools it sells to banks and brokers.35%
- These companies sell scores, ratings and data that lenders, insurers and investors have to buy, which keeps smaller players out. · S&P GlobalIt sells credit ratings, indexes and market data that only big institutions can afford, creating a barrier to entry., Fair Isaac CorporationIts score decides who gets a mortgage or credit card, directly controlling access based on data about individuals., MSCI IncIt sells the indexes and risk measurements that big investors use to build portfolios and ready-made signals for investment teams., TransUnionIt buys and sells personal data that lenders and marketers pay for, similar to other credit bureau operations., EquifaxIt collects data on millions of Americans and sells it to lenders, employers and marketers with little input from the people involved., FactSet Research SystemsIt sells data terminals that professional investors use for research, a view that everyday traders with chatbots do not get.26%
- These collect the most data and turn it into ads, products and decisions, but their prices already assume they win, so this slice stays small. · Meta PlatformsIt collects personal data on billions of people and uses it to sharpen ad targeting across its social platforms., AlphabetIt sees what billions of people search for and watch, then sells ads based on that data collection., Palantir TechnologiesIt turns large data piles into decisions for governments and corporations, with growth driven by subscription and project work., AppLovinIt uses AI and user data to decide which ads each phone user sees, making money when advertisers pay more for targeting.18%
- Cybersecurity firms get busier when data gets stolen or misused, and they still do fine if rules finally arrive. · CrowdStrikeIt provides security tools that companies buy to protect against breaches when data piles up without rules., Palo Alto NetworksIt sells security tools to large companies that pay more when data protection becomes urgent or rules arrive.13%
- Cash8%