Building A Process To Avoid Drowning In Information

As you may have guessed by the name of the firm we are big into process. If you work at it you can make almost anything more efficient. This tends to be a good thing for those of us who don’t like missing things that we should have seen.

When it comes to the constant deluge of information having a process becomes even more important as you don’t want to miss important and useful things but you also don’t want to waste hours and hours reading useless pieces either.

With all that said I will describe how I try and consume information.

Broadly speaking we use four categories of info: news, opinion pieces, research, and everything else.

News-a lot of this is calendar based. For instance the PMI data always comes out on the first business day of the month. Other news would be central bank statements, Treasury releases, company earnings, etc. Anything data or news that comes out on a regular basis as well as “breaking” news. We maintain an econ release calendar so that we don’t miss new data. We maintain an earnings calendar so that we can better follow specific companies as well as for risk management.

Opinion pieces-these can range from some blogger to bank research on a company or a trade idea. Some of it is evergreen but most of it is timely. This is the number one area where people screw up though. Too often you only go looking for sources that agree with your beliefs.  You need to make sure you are balancing that out with other smart people who have different beliefs. Otherwise you are just confirming your priors and you have a mirror in your bathroom you could talk to for that. It is critical that you try and expand your reading from people you always agree with to people you regularly disagree with that have well organized thoughts

Research-by research we mean SSRN type stuff. If a stock analyst says XYZ is going to $123 then great but that is based on their opinion and assumptions. By research we mean some Fed researcher who has been looking at effects of inflation on household consumption and things like that. Other research could include trading strategies that have been tested and show how X affects Y.  One of the great things about research is that you can read it when you have time. Alternatively one of the bad things about research is that you can put the reading off until you have time, that you never have.  Consequentially you need to ensure that you make time for it. Maybe you make the same time available each day or week on your calendar or maybe you just block out two hours each day.  When you read this stuff is not as important as actually reading it.

Everything else-Anything from geo-politics to how to build a road can fit into this bucket. It is obviously a catch all, and yet longer term it is important to always be learning more. This bucket is a bit nebulous but it is anything that does not fit in the other three buckets.

Right now you might be thinking “dude that is too much stuff to ingest” and you would be both right and wrong. Right in the sense that this is potentially a LOT of reading. Wrong in the sense that if you actually break your week down you already do 80% of this but probably not deliberately.  Econ data? Part of that is reading the release but the other part is hitting the “update data” button in Excel with the FRED plugin.  Presumably you keep your models up to date. Fed statements? If you do macro you read this right when it comes out. 70% of the time you then get on with your day. The other 30% of the time you have to read it again and compare it to the last one because something important was actually said. Joe Blow the analyst that you love? Well you already make time to read his stuff.

So I am talking about organizing your reading so that you do not miss things that you would otherwise read. Another important reason to organize your process is that it helps you gauge if something is really worth putting into, or keeping in, the rotation. I do a source purge every few months and it is very liberating.

So how do you take all of the above and actually read it in an efficient manner? I use software, but maybe you have a different way.

I use a RSS reader called Feedly. There are others but this is the one I like. I can put in any site with a RSS feed and it will automatically populate anytime a site has a new piece out. If it does not have a new piece it does not show up.  Massive time saver as well as an organizer. Remember when you had nine billion sites in your browsers favorites and you had to go to each one to see if they have new stuff?  With a RSS reader you don’t need to do that….much.  But with Feedly I organize my sources by topic and then each day open up a new browser window and go through and read.

Sadly while most websites are set up with RSS there are a few that are not. For those I use my browser favorites. Again though I then break them down by topics so that I can be both organized and efficient.

The next tool I use, and for this has become essential, is Evernote. There are other similar services but Evernote has for the most part worked for me.

I am not Rainman but I am above average at reading comprehension. So I can usually remember what I read, but with the volume of info I ingest I do partially forget things all the time. By saving almost everything I read into Evernote I only need to remember a little bit to find the document and read it again. Depending on how well you can recall info would dictate what tools you would need.

We have already talked a bit about calendars but you don’t want to have a big position on and then get blindsided by something you spaced out on that appears on a calendar. Econ and earnings calendars are all over the internet. Find one you like and then go in each week and fill your calendar with these events. Sounds a bit tedious but it is simple and only takes a couple of minutes once you figure out what is important to you.

Finally, at least for this post, we have actual notes. I take two different kinds. One is in notepad on my desktop. I have two different notepads. One is called “letter” where I put in bullets of things that I might want to write about in the weekly letter. The other is called “stuff.” Here I put in anything I might be interested in. Each day I clean this one out but I find it useful.

Then there is the physical notepad. Yes, I write things by hand. I find it a good way to outline different things. For instance I literally outlined this post on a notepad. I also have a notepad full of quotes, one with marketing ideas, and one with “things to build.”  You may or may not like using actual paper, but it is probably worth trying out.

OK, so actually I have one more thing. I use small whiteboard for my watchlist. I also have it uploaded into my quote screen but each night I revise my watch list and keep it on a paper sized whiteboard.

That is it. This is how I manage my information flow.  Like anything this is not fixed as I change things here and there but most of this process is what I have been using for some time now. You might find that it works for you or that you need something totally different. But you will find a lot of benefit by taking the time to work through your own information process.

Happy Trading and Be Safe,

P.S. If you liked this then take a free two week trial of our service. If you have any questions send me an email or find me over at Twitter @DavidTaggart