Use of Bloomberg

chokingvictim · Post by **chokingvictim** » Sun Sep 30, 2007 10:31 pm

I'm starting a new job at an accounting firm. My division/branch does audits strictly with mutual and hedge funds. I was being shown how to use Bloomberg to verify NAVs and the guy showing me told me that pretty much every trader uses Bloomberg. I thought that there were lots of companies out there with software that provided real-time trade information and some funds designed their own software to be faster or more efficient for their needs. Is Bloomberg really used by pretty much every trader?

FDAXHunter · Post by **FDAXHunter** » Mon Oct 01, 2007 10:16 am

I'd say >95% of all bank traders use Bloomberg. Outside of banks the number is lower, but still north of 80%.

Even shops that don't use Bloomberg as a component of their primary business model, often still have a terminal or two sitting around. It's more or less ubiquitous.

(We don't use Bloomberg)

Bachelier · Post by **Bachelier** » Mon Oct 01, 2007 10:52 am

i will add the one thing I am *sure* about Bloomberg.

and I mean *certain* as in 100%.

The NAVs on Bloomberg are wrong.

I've managed funds that appear on Blmberg for nearly a decade, and *not*once* have they ever had the NAV of my funds correct. Daily, weekly, monthly, or yearly...all for crap. And no, it is not like I have huge inflows and outflows.

I have no idea where they get their data, but it isn't from my custodian.

if you are an auditor and using Bloomberg to get your NAVs then I am afraid. I'm very afraid.

chokingvictim · Post by **chokingvictim** » Mon Oct 01, 2007 1:17 pm

I guess I could have been more precise. We don't type in a ticker symbol for a mutual fund. We use Bloomberg to verify prices of futures, options, etc. (to verify components of the NAV). Depending on what the fund does (ie take the last bid price of the day, etc) we just verify individual securities. It would make my job a lot easier if it was that simple, to just visit Yahoo! finance, type in the fund's ticker symbol, and say "okay I verified it. Unqualified report coming right up." :)

Bachelier · Post by **Bachelier** » Mon Oct 01, 2007 4:19 pm

thanks for the additional info.

also, be very careful of all Bloomberg option pricers. this includes bonds with embedded options and their z-score.

chokingvictim · Post by **chokingvictim** » Mon Oct 01, 2007 9:02 pm

^^ I'll have to find out about that. As of right now, my mutual fund clients don't have anything other than stocks, dividends, and investments in ETF's and other closed-end mutual funds (I'm new so they're starting me with some basic, simple funds). I'm hoping to get into doing work on some of the company's hedge fund clients in the near future though. But thanks for the info.

chokingvictim · Post by **chokingvictim** » Mon Oct 01, 2007 11:46 pm

After reading your first post again, I'm kind of surprised about something. If Bloomberg often differs from your own NAV, I'm surprised there aren't more differences in the few funds I've audited.

We reconcile their numbers (so far the funds I've experienced all use MSS) to Bloomberg and figure out differences if there are any. I've experienced only a few minor differences so far, but nothing unusually frequent and/or large.

Path Integral · Post by **Path Integral** » Tue Oct 02, 2007 11:16 am

I second Bacheliers opinion. IME the calibration of their Hull-White and Heston pricers sucks. They're overly vague on the implementation of their pricers as well.

Tradenator · Post by **Tradenator** » Tue Oct 02, 2007 12:14 pm

Last time I used Bloomberg, they had shit comodity futures data. At the time they claimed they were reloading entire databases purchased form the exchange to lift their game. Does anyone know if this has been done, are they any good now? Have the LME 3rd Wednesday contracts been tickerized properly? Are there still gaping holes in the history for various markets?

Bachelier · Post by **Bachelier** » Tue Oct 02, 2007 3:46 pm

"If Bloomberg often differs from your own NAV, I'm surprised there aren't more differences in the few funds I've audited."

I have no idea why. But my hypothesis, which I never bothered to test, was that they had all my Mom & Pop investors inflows and outflows right, butthey had no clue or very very stale data on when a major institution was in or out.

We specifically told our auditors not to rely on Bloomberg data.

I also manage OTC investments, and 90% of my investor base is institutions, so that may have something to do with it. Also, I manage funds registered in France, Lux, UK, & and some cross registered ones, so maybe jurisdiction disclosure has some sort of stupid built in lag. But I really have no clue why they are bad, only empirical evidence that they are.