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I don't think this is true at all. 10,000 people are just going to have more ideas and better individual ideas than 100 experts. The impact of that much creativ
by karmacondon 10y ago
I don't think this is true at all. 10,000 people are just going to have more ideas and better individual ideas than 100 experts. The impact of that much creativity and perspective can be exponential, and it's hard to duplicate.
When I'm designing a system, I hate to have to try to out think everyone on the internet. If you have a known set of opponents you can predict what they might do. When you're up against anybody from anywhere, you never know what you're going to get. Global scale collaboration is a very powerful thing because it allows a complete exploration of the solution space, and it's difficult to stop.
- iopuy 10y agoI absolutely disagree. I'll take the word of 100 experts over 10,000 amateurs.
- bcherny 10y agoThe two aren't exclusive. What's to stop the experts from doing this as a side project?
- sseveran 10y agoThey stand to lose a lot for relatively little gain. Hedge fund non-competes are very, very carefully enforced. Making money trading on the side would get you sued.
- taneq 10y agoExamples of the word of 10,000 amateurs: * Anti-vaxxers * The healing power of crystals * Moon landing conspiracy nuts * Multi-level marketing
- darawk 10y agoThere are also 'experts' in these fields, so your point is moot.
- wallace_f 10y agoOK, but how many physicists support the moon landing conspiracy? How many aerospace engineers support the moon landing conspiracy? What credentials do the experts of the moon landing conspiracy have that I should trust? I think he has a valid point if you have bias in which experts you place trust. There are, in fact, a lot of experts -- and even academically tenured, credentialed, published experts -- that I agree, don't have much of anything worthwhile to say.
- darawk 10y agoYa, true. There are particular areas though where 'wisdom of the crowds' works much better than any expert, and then there are obviously areas where it does not. I'm not sure exactly what the properties of each type of problem are, but it doesn't seem at all obvious to me that stock picking is not one in which a sort of herd optimization approach might be very effective.
- tomp 10y agoExamples of the word of 100 experts: * LTCM implosion * The Great Recession * Libyan and Syrian wars * Fukushima
- sseveran 10y agoThe interesting factor here is strategy sizing. The 100 experts need to manage portfolios of a certain size. The amateurs don't. There are people who can carve out a living of a strategy that has sustainable alpha but would not be attractive to hedge funds due to the capacity of the strategy.
- Ameo 10y agoThis is absolutely true. Many, many strategies that are viable at small portfolio sizes fall off very quickly when millions, tens of millions of dollars start to be used for them. Although the world's financial markets are massive, the little inefficiencies that can be exploited for profit often aren't.
- roel_v 10y ago"This is absolutely true. Many, many strategies that are viable at small portfolio sizes fall off very quickly when millions, tens of millions of dollars start to be used for them." I've thought this for nearly a decade now, yet have never seen or thought of such a thing. Of course I'm just an idiot so the fact that I didn't think of any means nothing; but you'd think that in all that time looking for it, someone somewhere would have described such a thing, even if only to make money on 'how to find small-portfolio investment strategies' ebooks and seminars. So I'm curious what makes you say 'absolutely true' rather than 'I think so too'.
- flashman 10y agoThe excellent thing is we have fund size as a scoring system.
- gtrubetskoy 10y agoMy point is that in the world of quants, it's more like there is 10,000 paid experts who are not about to share anything and 100 amateurs.