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There are comparable talents to Warren Buffett, and Seides could have chosen them. If Jim Simons wasn't retired, I'd happily give up the legal right to invest i
by dsacco 10y ago
There are comparable talents to Warren Buffett, and Seides could have chosen them. If Jim Simons wasn't retired, I'd happily give up the legal right to invest in the S&P 500 ever again just to invest with him if that was somehow a requirement.
Instead, Seides did...whatever this silly attempt was. I get that the "fund of hedge funds" clause was his idea, but it was stupid.
I use the word "stupid" unironically, fully self-aware of potential Dunning-Kruger, and I reiterate - there was nothing sensible about his taking the bet at those terms. It was never a defensible position that hedge funds as an aggregate industry outperform the market - maybe before the turn of the century, but not after the market became saturated with every Tom Dick and Larry with a shingle outside their doors.
Even if it fundamentally changes the goal of the bet, Seides should have had different terms if he really wanted to win.
- firebones 10y agoI'm interested: with Jim Simons, is it some acumen you believe in, some method he employs, or some connections/stature that leads good deals to his door? For instance, with Buffett, it seemed his stature, historical perspective, and means allowed him to invest $5B in Goldman Sachs at the near height of panic, under terms that very few were able to get. (Caveat: I don't know anything about Simons, but I'm very curious about the basis for your claim/offer, knowing that in the HN crowd, you have a lot of industry experience.)
- valuearb 10y agoBuffett will tell you value investing isn't just being good at valuing investments, its practicing dozens of little techniques to eliminate outside influences from your thought process, so you can make rational decisions in every market. Some smart investor fail because they can't control their own psychology. Read the Mr Market parable for an overview.
- dsacco 10y agoI'm aware of what you're saying about Buffett (he is essentially an excellent and influential business magnate, not just an excellent investor), but it doesn't apply to Simons. He's a mathematician (Chern-Simons theorem), and his investing methodology is utterly different from Buffett's. Simons' firm, Renaissance Technologies, doesn't do value investing. They were one of the first hedge funds to do quantitative financial modeling. I suspect a lot of what they do is market making instead of purely directional trading, but it's hard to know since the fund is incredibly secretive. Simons' business connections or acumen in the traditional sense have nothing to do with the fund's success; it's entirely about the strategy they employ.
- firebones 10y agoThanks for the clarification and explanation.