Growing distrust in official economic data is creating a new investment theme focused on alternative data providers. As markets seek independent "second opinions" on metrics like inflation, the demand for these services is expected to rise significantly. While many emerging players in this space are private, investors can gain exposure through established public companies. Consider State Street (STT) as a publicly-traded financial services firm that could benefit from this trend. Investing in STT offers an indirect way to capitalize on the growing demand for independent data and analytics.

Investment Theme: Alternative Data Providers

• The core idea discussed is a growing distrust in official economic data from sources like the Bureau of Labor Statistics (BLS).
• The speaker suggests that markets will increasingly turn to alternative data sources to get a "second opinion" on official numbers for metrics like inflation.
• This trend is compared to the situation in China, where independent research providers have built businesses on providing alternative data for every official government report. The speaker suggests the US is heading in a similar direction.

Takeaways

• There is a potential investment opportunity in companies that specialize in collecting, analyzing, and selling alternative data.
• As trust in official sources wanes, the demand for these independent "second opinions" could grow significantly, benefiting companies in this sector.
• Investors can also use these alternative data sources themselves (like the ones mentioned below) to make more informed decisions, rather than relying solely on government-provided statistics.

Truflation

• Mentioned as a key example of an alternative source for inflation information.
• Truflation provides independent, real-time inflation data, which can be used to verify or challenge official government figures.
• Note: Truflation is a private company, so direct investment in its stock is not currently possible for the general public.

Takeaways

• While you cannot invest in Truflation directly, its mention highlights the growing importance of the alternative data sector.
• Investors can use Truflation's data as a tool for their own analysis to get a more accurate, real-time picture of inflation, potentially giving them an edge in their investment decisions.

State Street (STT)

• State Street was mentioned alongside Truflation as another alternative source of information that markets may look towards.
• The context implies that State Street provides data and analytics that can serve as an independent check on official economic numbers.

Takeaways

• State Street, as a large, publicly-traded financial services company (STT), may have business lines that benefit from the growing demand for alternative data and analytics.
• Investors looking to gain exposure to the alternative data theme through a publicly-traded company could consider State Street as a potential, indirect play on this trend.