Introducing DARPA

Tyler Durden's picture

Dear Readers,

Today is Zero Hedge's ten month anniversary.  What started off as an experiment in focused distributed content has become a site which has clocked over 30 million hits, has over five hundred thousand recurring monthly readers, and touches on virtually every aspect of economics, finance and capital markets. Having some modest influence on broader policy through our objective and systematic unmasking of complex "behind the scenes" issues has been merely frosting on the cake for us, as well as some degree of validation that our pursuit of the unvarnished truth is the right approach. We are happy that we now have the support of over 50 contributors (and many more waiting to be unleashed) as we grow and as topics we could never hope to cover alone but deserving of a detailed examination appear.

If we have learned one thing in these ten months, is that the old "soapbox" media model is dead.  The future belongs exclusively to distributed content, where constant reader feedback is critical to fine-tuning and expanding any given theme or topic. This realization is why we are happy to present to you our latest product: the Distributed Analysis and Research Portfolio Aggregator page, or “DARPA.”

For many of you DARPA will not be a novel idea: leveraging on the concept developed originally by the somewhat secretive Value Investor Club, if not its various and less-secret offshoots.  We will provide a platform where anyone and everyone will be able to present sophisticated, bottom-up, fundamentally driven theses, analyses and write-ups, in very much the same way that traditional analysts present research ideas. While the focus at present is predominantly on credit ideas, the modular interface permits virtually any product to be presented as an investment idea, including equity, convert, cash and derivative credit, preferred, stub and merger arb. However, where Zero Hedge will differ materially from the prevailing trope of secretive investment clubs that limit author participation to 250 or so members annually.  Zero Hedge will have no such limitations. In fact, we hope to make DARPA the most democratic, distributed, open research platform available, and eventually convert it to a fully-blown untethered "ratings agency" where content is provided exclusively by readers, and, more importantly, evaluated, and commented on exclusively by readers. Each research piece will be rated purely on its merit by other DAPRA members, with the top research pieces and top authors prominently featured.

As noted, Zero Hedge is read monthly by over half a million people. Of these, about 30% originate from major financial institutions: investment banks, traditional asset managers, hedge funds, and others. Therefore the attraction of a DAPRA concept will be twofold:

i) to share one's top ideas with the key decision-makers of the financial community, and

ii) to have one's analytical talents noticed by the key portfolio managers. Expanding on this idea, we will soon develop a "marketplace" for research ideas, where research requests can be targeted to specific authors, and where DARPA analysts with established reputations can offer their analytical services to assorted portfolio managers.

Once we have a sizable cadre of DARPA members, we will streamline the rolodex and open it up to consultancy requests by asset managers for any of the thousands of registered Zero Hedge users who have proven their analytical skills on DARPA.

In essence, we have two main goals with DARPA:

i) to make obsolete the traditional rating agency model, by replacing it with a fully distributed, peer-rated, democratic research platform, and

ii) to provide an a la carte analyst/portfolio manager/trader talent retention service.  If, for example, fund manager X wants a research write up on any number of ideas in, i.e., the energy space, DARPA will provide an existing inventory of top rated energy industry contributors. Such retention could be either temporary, in the form of a consultancy agreement, or permanent, as a full-time hire.

We are confident that the over ten thousand unemployed hedge fund workers who are currently presenting their various investment theses (if their headhunters deign so) to money managers who use the recruiting process merely to "fish" for ideas, will be very happy to present their ideas to DARPA, and the over 100,000 dedicated professional asset management executives and decision makers who read Zero Hedge hourly.

As part of DARPA, it gives us great pleasure to present to you nearly 1,000 full credit tearsheets developed in collaboration with our partners at High Yield Blog. By presenting detailed, in-depth quantitative financial information, usually reserved for clients of much more expensive databases, these reports will facilitate much of the distributed analysis presented on Zero Hedge, as well as a serve as a quick reference on virtually any 'on the run' global High Yield name for the convenience of our fixed income-focused readers.  And as the representative universe consists of both American and European companies, our readers on both sides of the Atlantic will find this a most useful service.

Zero Hedge is also in discussions with several strategic partners with whom we hope to provide even more core research content as we build out DARPA into what we hope becomes the "go to" portal for not just objective, sophisticated credit analysis, but for distributed, comprehensive, unbiased research across all product classes.

We will run the DARPA service for free during its initial beta test. Subsequently, eventually a modest fee will be assessed, although authors of the top 20% highest rated ideas will have free access to the site. As for broader access to Zero Hedge, we are committed to maintaining free access the blog in its current format. Though we may launch certain add-on premium services in the future, what you see on the blog today will continue, free of charge.

And as any service is only as good as its content, we hope that our readers will immediately realize the benefits of presenting their sophisticated research ideas to the platform that addresses the broadest range of finance professionals. Therefore, any registered Zero Hedge member who wishes to be able to submit content to DARPA on an ongoing basis should contact darpa@zerohedge.com with an attached representative sample or submission proposal.

We hope that DARPA will be useful to not just our professional financial followers, but will serve to educate, enlighten and reach our entire readership.

The DARPA portal page can be accessed here.