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The article says: "Numerai’s fund has been trading stocks for a year. Though he declines to say just how successful it has been, due to government regulations a
by spuz 10y ago
The article says: "Numerai’s fund has been trading stocks for a year. Though he declines to say just how successful it has been, due to government regulations around the release of such information, he does say it’s making money. And an increasingly large number of big-name investors have pumped money into the company"
So perhaps they are sitting on piles of cash?
- nkrisc 10y agoInvestor cash, it sounds like.
- bluetwo 10y agoThe stock market itself has gone up in the last year. Exactly what regulation prevents funds from releasing information about their track record? Any fund you buy is provided to show you their track record, as well as "SEC Yield" a normalized measure of recent returns. Sound to me like they are trying to avoid being compared to other metrics, because they don't fare as well.
- piker 10y agoLaws against making a public offering, which hedge funds are generally subject to, prevent public disclosure of track records.
- bluetwo 10y agoI'm going to need a source on that one. That sounds like bunk.
- BickNowstrom 10y agoHedge funds do not want to run afoul of the SEC rules on marketing. Even though these rules were relaxed in 2013, the risk of revocation is there. http://www.newyorker.com/business/currency/why-arent-hedge-funds-advertising http://www.newyorker.com/business/currency/why-arent-hedge-f... I bet they show potential investors their returns. But to the public? That may be both iffy and unnecessary.
- bluetwo 10y agoShowing returns isn't the same as making a public offering. This article doesn't even claim that. Hedge fund managers do it on CNBC all the time without running afoul of the law.
- piker 10y ago"Given the uncertainty and potential adverse consequences of forfeiting the Regulation D exemption, many fund managers [are] careful to avoid specifically mentioning any fund names or details in interviews and press releases." Thomas P. Lemke, Gerald T. Lins, Hedge Fund and Other Private Funds: Regulation and Compliance, General Solicitation or Advertising Activities, S. 4:8 (2016). The edit above from "were" to "are" is based on my own experience as a practicing hedge fund attorney. While, as mentioned below, the JOBS Act loosened the compliance burden with respect to public offerings, most smart hedge fund managers still play by the old rules. "Avoid specific discussions of past performance--In the context of a press release or interview, providing applicable disclaimers and disclosures would be problematic and cumbersome. If a discussion of performance is unavoidable, the performance should be given net of fees." Id., Press Releases and Interviews, s. 5:12. We would generally advise our clients that there is no situation where a discussion of past performance is avoidable, and it should be avoided absolutely.
- vkou 10y agoThis screams 'Ponzi scheme'. If you are thinking of putting money into this, don't walk away - run away. Above-the-board trading institutions don't have problems with nebulous 'government regulations', when talking about how profitable their funds are.
- tomp 10y agoYou've no idea what you're talking about. Hedge funds (legally) can't advertise to retail investors (if they do, they're no longer hedge funds, which substantially increases their regulatory burden and narrows the range of strategies they can trade). Having said that, even if they could, they probably wouldn't want retail investors - if they're good, they can get rich investors (e.g. $10M+), reducing their administrative costs and allowing them to trade with longer horizons.
- bluetwo 10y agoI agree. Just look up ai-expert Ray Kurzweil and his hedge fund FatKat. Boom.