Cowen Benefits From Volatility as Active Investor

The video discusses how volatility in markets benefits brokerage businesses by increasing trading activity. It emphasizes the importance of investing in research and maintaining client engagement to capture market share. The discussion contrasts active and passive investment strategies, highlighting the need for actionable research and algorithmic trading to outperform passive strategies. The video also covers the significance of the IPO calendar in active management and the challenges faced by active managers in outperforming passive strategies.

How do brokerage businesses benefit from market volatility?

• They experience a decrease in trading activity.

• They see an increase in trading activity.

• They face more regulatory challenges.

• They lose market share to banks.

What is a key factor that differentiates brokerage firms in the active vs passive investment debate?

• Their ability to offer lower fees.

• Their focus on fundamental research.

• Their access to exclusive IPOs.

• Their partnerships with banks.

What is a rare commodity in the context of algorithmic trading?

• High-frequency trading.

• Publicly available algorithms.

• Independent algorithmic trading.

• Conflicted trading algorithms.

What role does the IPO calendar play in the performance of active managers?

• It has no impact on their performance.

• It helps active managers outperform passive managers.

• It only benefits passive managers.

• It increases the cost of active management.

Why is it challenging for active managers to consistently outperform?

• Due to the lack of available IPOs.

• Due to regulatory restrictions.

• Because of the need to beat the price advantage of passive management.

• Because passive management is more expensive.