Hedge funds are using a new and surprising tool to gain information on consumer and market trends: satellites.
These satellites are produced by a company called Planet Labs Inc.. It was founded by three former NASA scientists. Cubeseats are tiny, shoebox-sized, incredibly cheap satellites made from “off-the-shelf components,” and are making “some big leaps in 2016,” reports Air and Space.
Cubeseats can produce up close and accurate images of economically enticing spots for hedge funds like parking lots, farmland, shopping malls, and oil-fields.
Conventionally, hedge funds have hired out a third party company that could provide them with monthly or bi-monthly updates with images and data. With Planet Labs’ new satellites, investors could get access to weekly updates on trends and consumers. Currently, Planet Labs has just five dozen satellites in orbit, but plans to add around 40 more in the coming year. With this many satellites, the company would have “access to daily images of every piece of land on earth,” the Journal Reports.
Cubeseats have captured images of everything from “crop yields to the growth of Syrian refugee camps,” reports Bloomberg. These small satellites have already proven their importance not only to hedge funds, but to the world at large. They captured a wildfire in Canada and a “7.8 magnitude earthquake struck Ecuador,” according to Bloomberg.
Walmart and Target have been using this technology for two years now, analyzing images to see “changes in the number of cars in their U.S. parking lots.” Oil investors have also been quick to jump on this trend, as these satellites have provided “forecasts for oil inventories based on the height of floating lids in oil tanks.”
Planet Labs launches its satellites through many avenues, sometimes tagging along to launches at the International Space Station and other times tagging along with Elon Musk’s space launches, the Journal reports.
Some experts note that this technology isn’t always reliable in its capacity to predict market trends, although it has not been employed for long enough to come to a conclusion on viability. Others note that to accurately read this data, firms would have to hire an in-house scientist.
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