[Quantitative Investing Mini-Introduction] Summary of the Industrial Seminar on Quantitative Investment by Industrial Bank: History, Current Status, and Future of Quantitative Investing

1.1 History of Overseas Quantitative Equity Investing Let’s begin with quantitative equity investing. When and how did quantitative equity investing originate overseas? Initially, it was not an industry term but rather an academic one. We can broadly agree that quantitative investing began in 1900, with French mathematician Louis Bachelier’s doctoral dissertation titled 'The Theory of Speculation.' This paper essentially addressed how to make forward-looking judgments about asset prices. If one could perfectly predict today’s price, decision-making would be straightforward—knowing exactly when to buy and sell. A 100% accurate forecast (though impossible in practice) would guarantee perpetual profits. Following 1900, in the 1930s, Columbia Business School professors Benjamin Graham and David Dodd published their seminal book, 'Security Analysis.' What was its context? The early 1930s followed the 1929 stock market crash. While some may not be familiar with Benjamin Graham, most certainly know his most famous student—Warren Buffett. The purpose of this book was to teach investors that stock trading should not be impulsive or arbitrary; instead, decisions should be grounded in rigorous fundamental analysis of companies’ underlying financial and operational conditions—determining whether a given stock should be bought or sold. From then until 1952, Harry Markowitz introduced Modern Portfolio Theory (MPT), for which he received the Nobel Prize in Economics in 1990. For quantitative equity investing, MPT forms the foundational framework—optimizing portfolio construction while explicitly accounting for risk. It is fair to say that approximately 99% of traditional quantitative equity practitioners overseas rely fundamentally on this theory. Moving forward, we believe several seasoned professionals in the quantitative investment industry are present here—and many will certainly be familiar with the Fama–French three-factor model. Further along, in 1993, Jegadeesh and Titman published influential research on momentum-based trading strategies. Over the past several decades, the academic evolution of quantitative investing—especially quantitative equity—has been remarkably clear and progressive. Next, let’s turn to the industry. Below are several representative firms. The largest and most renowned is Barclays Global Investors (BGI), founded in 1964 and acquired by BlackRock in June 2009. In 1971, BGI launched the world’s first index strategy fund; in 1977, it launched the first actively managed quantitative equity strategy fund.

U.S. Stock Tracking – June 5, 2020

The company operates across two main divisions: diagnostic agents and therapeutic development programs. It has developed the Manocept platform, designed to target the CD206 mannose receptor expressed on activated macrophages. Its CD206-targeted drug platform supports multiple diagnostic modalities—including single-photon emission computed tomography (SPECT), positron emission tomography (PET), imaging and localized gamma scanning, as well as intraoperative and/or optical fluorescence detection—while also serving as a delivery system for therapeutic compounds targeting macrophages and immune- and inflammation-related diseases. It offers NAV4694, a fluorine-18–labeled PET imaging agent used for imaging and assessing patients exhibiting signs or symptoms of Alzheimer’s disease and mild cognitive impairment. It develops diagnostic agents including Technetium Tc 99m tilmanocept and other diagnostic applications based on its Manocept platform, alongside various other therapeutic development programs. The company collaborates with IMV Inc. on preclinical therapeutic research to explore potential synergistic effects of its platform-based immunotherapies. The company’s total revenue has declined year-on-year over the past few years. In Q1 2020, revenue rose year-on-year, but net losses widened. Cash on hand decreased year-on-year, indicating growing liquidity pressure; non-current deferred revenue remained stable. Its stock hit a low of $0.63 on April 16, 2020, and rose 4.45% on June 23. On June 26, the stock opened 2.25% higher, then declined to −4.26%, fluctuated upward and downward multiple times, and ultimately closed down −0.5% above the opening price. Trading volume was 1.55%. Market capitalization slightly exceeded enterprise value. Twenty-eight institutions held shares, representing 7.02% of total shares outstanding. No analysts issued recommendations. Given the risk of chasing highs, trading activity remains infrequent—caution is advised. LXU (LSB Industries, Inc.) A U.S.-based chemical manufacturer and distributor founded in 1968, headquartered in Oklahoma City, Oklahoma. The company supplies nitrogen-based fertilizers—including aqueous ammonia, fertilizer-grade ammonium nitrate (HDAN), and urea ammonium nitrate solutions—as well as fertilizer blends for corn and other crops, and NPK fertilizer mixtures. It also provides high-purity and commercial-grade ammonia, high-purity ammonium nitrate, sulfuric acid, mixed nitrating acids, carbon dioxide, and diesel exhaust fluid. Its nitric acid products—concentrated, mixed, and conventional—are used across diverse applications, including semiconductors. Additionally, it supplies polyurethane intermediates; chemicals for pulp and paper manufacturing, alum production, water treatment, metal processing, and vanadium extraction; emissions-reduction additives for power plants; refrigerants; industrial-grade ammonium nitrate, ammonium nitrate solutions, and HDAN solutions for mining, open-pit mining, quarrying, and construction; horticultural/greenhouse applications; refrigeration; and specialty emulsions for industrial use. The company’s total revenue has declined year-on-year over the past two years. In Q1 2020, net income losses widened. Cash on hand remains ample. Its stock peaked at $4.37 on January 17, 2020, and bottomed at $1.04 on May 19. On June 26, the stock opened 0.46% higher, then oscillated downward to −3.67%, fluctuating upward and downward several times before rallying late in the session to +5.5%, closing up 3.67% above the opening price. Trading volume was 8.41%. Market capitalization was significantly lower than enterprise value. One hundred thirty-five institutions held shares, representing 84.86% of total shares outstanding. One analyst issued a strong buy recommendation—worthy of attention. PHIO (Phio Pharmaceuticals Corp.)

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