Beyond the Footnotes: Why Unconventional Indicators Are a Big Deal for the Modern Economy

The Curious Case of the Large Shoe Size

In the world of high finance and rigorous economic analysis, insights can come from the most unexpected places. Sometimes, it’s a complex quantitative model; other times, it’s a passing comment. A recent letter to the Financial Times, pithily titled “Good to see large shoe sizes are not a footnote,” serves as a perfect, if cryptic, jumping-off point for a crucial discussion. While the letter itself was just a name and a city, its title is a brilliant metaphor for a powerful shift occurring in finance, investing, and economics.

For decades, certain data points, market segments, and economic indicators have been treated as “footnotes”—curiosities relegated to the margins of serious analysis. These are the “large shoe sizes” of the economy: niche, seemingly inconsequential, and often overlooked by mainstream models. However, in an increasingly complex global market, savvy investors, business leaders, and financial professionals are realizing that these footnotes contain the headline stories of tomorrow. This post explores why these unconventional indicators are stepping out of the shadows and into the spotlight, transforming how we understand the stock market, manage our investments, and predict economic trends.

When Traditional Metrics Fall Short

The bedrock of modern economics has long been a set of core indicators: Gross Domestic Product (GDP), the Consumer Price Index (CPI), unemployment rates, and manufacturing purchasing managers’ indexes (PMI). These metrics are invaluable for gauging the overall health of an economy. They are the foundation of central banking policy, government fiscal planning, and corporate strategy. Yet, they have significant limitations.

Firstly, they are often lagging indicators. GDP figures, for instance, tell us where the economy was a quarter ago, not where it is today or where it’s headed tomorrow. By the time this data is confirmed, the market has often already moved on. Secondly, they are broad aggregates that can mask crucial underlying trends. A healthy national GDP figure might hide deepening stress in specific sectors or regions. The 2008 financial crisis famously exposed how headline strength could conceal systemic rot within the banking system.

In today’s fast-paced, digitally-driven world, relying solely on these slow-moving, high-level statistics is like driving a car by looking only in the rearview mirror. This has fueled a fervent search for more timely, granular, and predictive data sources—the so-called unconventional or alternative indicators.

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From Lipstick to Satellite Feeds: The Evolution of Alternative Data

The idea of using quirky metrics to gauge economic sentiment is not new. For years, economists and market watchers have anecdotally tracked a variety of “indexes” that reflect consumer behavior in ways official data cannot.

• The Lipstick Index: Coined by Leonard Lauder of Estée Lauder, this theory posits that in times of economic downturn, women will indulge in small luxuries like lipstick instead of more expensive items. A spike in lipstick sales could therefore signal a coming recession.
• The Men’s Underwear Index: Former Fed Chairman Alan Greenspan was a purported follower of this metric. The rationale is that men’s underwear is a basic necessity, and when sales drop, it means consumers are cutting back so severely that a recession is likely underway.
• The Champagne Index: Conversely, tracking sales of luxury goods like champagne can provide a real-time gauge of consumer confidence and discretionary spending at the higher end of the economy.

While these indexes are more thought experiments than scientific tools, they highlight a fundamental truth: everyday transactions contain valuable economic signals. The table below summarizes a few of these classic, quirky indicators.

What has changed dramatically is our ability to move beyond anecdotes and into hard, quantifiable data. The explosion in financial technology (fintech) and big data analytics has professionalized the hunt for alternative data. Today’s unconventional indicators are not about lipstick; they’re about satellite imagery, credit card transactions, and blockchain-verified supply chain logs. According to Grand View Research, the global alternative data market size was valued at USD 2.7 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 58.5% from 2022 to 2030. This isn’t a footnote; it’s a booming industry.

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How Alternative Data Creates a Trading Edge: A Case Study

To understand the practical power of this shift, consider how a modern quantitative hedge fund might operate. Instead of waiting for a company’s quarterly earnings report, the fund uses a mosaic of alternative data to build a real-time picture of its performance.

Let’s take a hypothetical example of a major retailer like Walmart. A fund could:

1. Use Satellite Imagery: Companies like Planet Labs provide high-frequency satellite images of the earth. The fund’s algorithms can analyze these images to count the number of cars in Walmart parking lots across the country, providing a highly accurate, day-by-day proxy for in-store foot traffic and sales.
2. Analyze Credit Card Data: Data aggregators (who anonymize and sell transaction data) can provide a direct feed of consumer spending at the retailer. This gives an almost perfect read on revenue long before the company officially reports it.
3. Track Geolocation Data: Mobile phone location data (anonymized and aggregated) can reveal not just how many people visit a store, but how long they stay and what other stores they visit, offering insights into market share and consumer loyalty.
4. Monitor Supply Chain Data: By tracking shipping manifests and port activity, the fund can estimate inventory levels and the flow of goods, predicting potential supply chain disruptions or surges in demand.

By combining these disparate sources, the fund can build a highly accurate forecast of Walmart’s quarterly earnings weeks or even months in advance. This information advantage allows them to make smarter trading decisions, either buying or selling the stock before the rest of the market reacts to the public earnings announcement. This is the new frontier of financial technology and a core reason why the field of quantitative trading has exploded.

The “Large Shoe Size” Economy: Investing in Overlooked Markets

The metaphor extends beyond just data; it applies to entire markets. The “large shoe sizes” are also the niche, underserved, or emerging sectors that are ignored by mainstream capital but possess immense growth potential. While large-cap tech stocks dominate headlines, some of the most compelling investment opportunities lie in these footnotes of the global economy.

Consider the market for adaptive clothing for people with disabilities or the rapid growth in pet-related fintech (e.g., insurance and payment platforms for veterinary care). Think about the technology being developed for vertical farming to address food security or enterprise software tailored for the highly-regulated cannabis industry. Even the literal market for plus-size apparel—a classic example of an underserved consumer base—has become a multi-billion dollar opportunity that was ignored for decades (source).

These markets often thrive because they are “too small” or “too complex” for giant corporations or investment funds to focus on initially. This creates a fertile ground for startups, specialized private equity, and savvy individual investors who do their homework. The rise of crowdfunding platforms and decentralized finance (DeFi) built on blockchain technology is further democratizing access to these niche investment opportunities, allowing capital to flow to areas previously deemed too obscure for the traditional banking and venture capital ecosystem.

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Conclusion: It’s Time to Read the Footnotes

The financial world is undergoing a profound transformation. The old ways of measuring the economy and identifying investment opportunities are no longer sufficient. The digital revolution has armed us with the tools to see the market with unprecedented clarity and granularity, turning once-ignored footnotes into headline news.

From using satellite data to predict oil inventories to investing in the burgeoning market for alternative proteins, the lesson is clear: the most valuable insights are often found where no one else is looking. The “large shoe sizes” of the economy—the unconventional indicators and niche markets—are no longer just curiosities. They are essential components of any modern investment strategy and a critical lens for understanding the complex, interconnected global economy. For investors, entrepreneurs, and leaders, the message is simple: ignore the footnotes at your peril.