3 ms·

Luck seems to have no mention. The existence of people who've happened to bet on the correct side of the 9 or 10 huge events in the last 20 years surely exist,

by gte910h 17y ago

Luck seems to have no mention. The existence of people who've happened to bet on the correct side of the 9 or 10 huge events in the last 20 years surely exist, and that is sure to make them at least moderate successes if they don't do completely stupid things. Given enough series of die rolls by enough different rollers, there is inevitably going to be some with long strings of success. It only takes looking at 1024 cases before you find someone who bet correctly on 10 binary decisions. There are assuredly more than 1024 funds. He might have some special sauce, or may have done some smart things, but it is just as possible he's just #1024

watty 17y ago
"100 portfolio managers buy and sell 100 million shares a day" Luck should have been mentioned but the sheer volume of trades and absurd average over 18 years makes it seem like they DO have some special sauce... and a lot of it.
- bjoernw 17y ago
  since when does trading volume suggests special sauce? you can buy and sell 100 million shares a day and only trade 20 stocks.
  - watty 17y ago
    I didn't suggest volume alone suggested special sauce, " sheer volume of trades and absurd average over 18 years makes". I was more trying to get the point across that they weren't rolling one die for 18 years but rolling it thousands of times. All this talk about special sauce is making me hungry...
- gte910h 17y ago
  In general, most trades are a wash, not a huge up or down swing. It's the big events, like betting against the dotcom crash, betting against enron, etc, which make or break this size fund. Those are the 9 or 10 events I'm talking about. These people are probably rarely betting on something more than 1:10 odds. But for those huge cases, they were probably getting 1:100 or 1:1000. Those are the ones it is so important to be on the right side of, and dampen quite a bit of suboptimal whatever in the meanwhile. He quite specifically bet against the housing and dotcom boom as mentioned in the article, therefore shows to be betting most importantly on those 1:1000 events.
qq66 17y ago
SAC Capital is not #1024. They literally have strong control over the markets. Their process, systems, and relationships allow them to, for example, buy all of the offered stock from multiple investment banks at once, constraining the supply. It's really a failure of regulation.
- gte910h 17y ago
  That is certainly enlightening to the discussion: They're not lucky, they just hold all the cards.

by gte910h 17y ago

watty 17y ago

"100 portfolio managers buy and sell 100 million shares a day" Luck should have been mentioned but the sheer volume of trades and absurd average over 18 years makes it seem like they DO have some special sauce... and a lot of it.

bjoernw 17y ago
since when does trading volume suggests special sauce? you can buy and sell 100 million shares a day and only trade 20 stocks.
- watty 17y ago
  I didn't suggest volume alone suggested special sauce, " sheer volume of trades and absurd average over 18 years makes". I was more trying to get the point across that they weren't rolling one die for 18 years but rolling it thousands of times. All this talk about special sauce is making me hungry...
gte910h 17y ago
In general, most trades are a wash, not a huge up or down swing. It's the big events, like betting against the dotcom crash, betting against enron, etc, which make or break this size fund. Those are the 9 or 10 events I'm talking about. These people are probably rarely betting on something more than 1:10 odds. But for those huge cases, they were probably getting 1:100 or 1:1000. Those are the ones it is so important to be on the right side of, and dampen quite a bit of suboptimal whatever in the meanwhile. He quite specifically bet against the housing and dotcom boom as mentioned in the article, therefore shows to be betting most importantly on those 1:1000 events.

qq66 17y ago

SAC Capital is not #1024. They literally have strong control over the markets. Their process, systems, and relationships allow them to, for example, buy all of the offered stock from multiple investment banks at once, constraining the supply. It's really a failure of regulation.

gte910h 17y ago
That is certainly enlightening to the discussion: They're not lucky, they just hold all the cards.