Process | ONeil Capital Management India | Alternate Investment Fund

Our Process

William J. O’Neil was a pioneer in the field of quantitative investment management. He studied many of the biggest winners to try to intuit what was driving the growth of companies. His search led him to simplify and distil many aspects of his research into a set of ratings and rankings that represent the dimensions of analysis that he found to be most predictive. The techniques and measurements that O’Neil developed early on are embodied in the O’Neil Methodology (OM) that still drives our discretionary process.

The same empirical analytical spirit that led William O’Neil to look for predictive factors drives our quantitative research process today.

Factors

The various dimensions of analysis that O’Neil studied manually for years we today identify as factors. Our quantitative research program is designed to find elements that are predictive of future price movements. Over the years, we have studied thousands of factors to understand how they perform over various market cycles and across multiple segments of the market.

The Lab

We are set up like a financial research laboratory that mixes scientists, engineers, and investment professionals on the same team. Our goal is to continually make new discoveries and be able to apply those findings from the lab to create strategies that outperform.

Quant Challenges

A danger of any empirical process is overfitting and overconfidence that a theoretical or simulated result will hold up in under real-world conditions. We believe that overfitting is perhaps the biggest challenge for systematic quant strategies. We take many precautions to avoid overfitting and other research pitfalls, such as p-hacking and harking.

The OCM research and strategy development methodology can be broken down into 7 distinct phases or “stations.”

The process illustrated in this diagram is remarkable on its own, as many quant shops address all or most of these “stations” as part of their research and strategy development process. However, at OCM, we believe that our point of differentiation is the degree to which we can accomplish these tasks through our 5 Ps: Pedigree, People, Philosophy, Process, and Performance. These five attributes form a unique confluence of investment experience and intuition, data science rigour, robust technical capabilities, and humble, dedicated people.

For five decades, the O’Neil name and the methodology pioneered by William O’Neil have created longevity and staying power unmatched by other investment advisors. Surviving, let alone thriving, across economic cycles, including more than one bear market provides invaluable insight. This long legacy today informs OCM’s approach to quantitative analysis, helping to identify opportunities and prove what will work.

1P

PEDIGREE

The success of our firm — from its performance to its culture — is attributable to the talent and selfless collaboration of our team. With many specialists hired from outside the financial industry, OCM benefits from a diversity of thinking and a supportive internal network in which scientists, analysts, and portfolio managers teach each other with an open frankness and appreciation for the strength of each teammate. Driven by a passion for the business, an unwavering belief in leadership and an optimistic ‘can do’ attitude, the OCM team revels in the innovative discoveries they pursue every day.

2P

PEOPLE

The core philosophy that drives our research and strategy process is rooted in the O’Neil Methodology (OM) that seeks to find predictive factors for equity investment. The OM inspires — but does not limit — the types of factors we research and many of the techniques we use for strategy development.

3P

PHILOSOPHY

By thinking differently and not being mainstream, OCM’s approach to developing algorithms leads to the construction of an unexpected type of portfolio: quant-driven investment opportunities that are recognizable to discretionary managers.

4P

PROCESS

The care and skill are undertaken through the research, design, and development process doesn’t matter if the end results do not meet our expectations.  We place much of our focus on performance – the performance of our investment strategies and the ability to deliver on our commitments to our clients.

5P

PERFORMANCE

PEDIGREE

For five decades, the O'Neil name and the methodology pioneered by Bill O'Neil has created a longevity and staying power unmatched by other investment advisors. Surviving, let alone thriving, across economic cycles including more than one bear market provides invaluable insight. This long legacy today informs OGA's approach to quantitative analysis, helping to identify opportunities and prove what will work.

PEOPLE

The success of our firm -- from its performance to its culture -- is attributable to the talent and selfless collaboration of our team. With many specialists hired from outside the financial industry, OGA benefits from a diversity of thinking and a supportive internal network in which scientists, analysts, and portfolio managers teach each other with an open frankness and appreciation for the strength of each teammate. Driven by a passion for the business, an unwavering belief in leadership, and an optimistic ‘can do’ attitude, the OGA team revels in the innovative discoveries they pursue every day.

Philosophy

The core philosophy that drives our research and strategy process is rooted in the O’Neil Methodology (OM) that seeks to find predictive factors for equity investment.?The OM inspires -- but does not limit -- the types of factors we research and many of the techniques we use for strategy development.

Process

By thinking differently and not being mainstream, OGA’s approach to developing algorithms leads to the construction of an unexpected type of portfolio: quant-driven investment opportunities that are recognizable to discretionary managers.

Performance

The care and skill undertaken through the research, design, and development process doesn’t matter if the end results do not meet our expectations.? We place much of our focus on performance – the performance of our investment strategies and the ability to deliver on our commitments to our clients.

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