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Why on earth do you think the top quant companies will leave alpha on the table for you to snatch up? That sounds too much like wishful thinking to me. Furthe

Why on earth do you think the top quant companies will leave alpha on the table for you to snatch up? That sounds too much like wishful thinking to me. Furthermore, if someone is really smart enough to beat the market consistently why on earth would they trade just on their own personal account? Work for a hedge fund and use other people's money to leverage your bets.

dsacco 9y ago
> Furthermore, if someone is really smart enough to beat the market consistently why on earth would they trade just on their own personal account? Alternatively, if you have a strategy that empirically works, and a strategy for identifying such strategies, why take on investors to share the risk? You can scale up your own investment and leverage yourself with less regulatory oversight. Why on earth do you think the top quant companies will leave alpha on the table for you to snatch up? It's not so much that they leave alpha on the table, rather that there is so much alpha available, and the capacity constraints and reward profiles are so different for many of them, that individuals can prosper outside of a firm. They just normally don't, because they lack the same training (and because it's very competitive).
SomeStupidPoint 9y ago
Some strategies only work with small investment sizes or require a lot of effort, so don't scale well. Big firms leave tons of (for them) small opportunities on the table, because it's not worth their time. Similarly, there are people who can regularly beat the market that don't have much to offer large funds because their methods don't scale.
- ant6n 9y ago
  Like Buffet who said it's easy to invest even you only have a couple million, and much harder when you have billions.
ozi 9y ago
Strategies have varying degrees of scalability. It's possible to find consistent returns on a personal scale that would be unfeasible to scale to $100M+ portfolios

dsacco 9y ago

> Furthermore, if someone is really smart enough to beat the market consistently why on earth would they trade just on their own personal account? Alternatively, if you have a strategy that empirically works, and a strategy for identifying such strategies, why take on investors to share the risk? You can scale up your own investment and leverage yourself with less regulatory oversight. Why on earth do you think the top quant companies will leave alpha on the table for you to snatch up? It's not so much that they leave alpha on the table, rather that there is so much alpha available, and the capacity constraints and reward profiles are so different for many of them, that individuals can prosper outside of a firm. They just normally don't, because they lack the same training (and because it's very competitive).

SomeStupidPoint 9y ago

Some strategies only work with small investment sizes or require a lot of effort, so don't scale well. Big firms leave tons of (for them) small opportunities on the table, because it's not worth their time. Similarly, there are people who can regularly beat the market that don't have much to offer large funds because their methods don't scale.

ant6n 9y ago
Like Buffet who said it's easy to invest even you only have a couple million, and much harder when you have billions.

ozi 9y ago

Strategies have varying degrees of scalability. It's possible to find consistent returns on a personal scale that would be unfeasible to scale to $100M+ portfolios