As I stated, the market is largely efficient. I did not say it is completely efficient. Also throwing out Rentech as an example just further proves my point.

As I stated, the market is largely efficient. I did not say it is completely efficient. Also throwing out Rentech as an example just further proves my point. The inefficiencies that Medallion fund is exploiting are extremely capital constrained (ie. They are very tiny). This is why they don’t accept outside investor money and even limit the amounts employees can have in the fund. The fund is limited to roughly $3 billion, because the inefficiency they are exploiting is that small. An inefficiency of $3 billion in capital markets of roughly $100 trillion dollars is tiny. All of Rentech’s larger funds for outside investors have not shown the same ability to beat the market. Also, I’m amazed that you use Asness as a counterpoint, because if you’ve ever heard him speak, he would agree that the market is “largely efficient.” I’ve literally heard him say those words in person. Asness’s entire hedge fund is based on Fama’s factor models. He literally makes his money by making the market even more efficient. He has admitted long-short factor funds like his have likely reduced (and will continue to reduce) factor alpha, hence why they need to apply leverage to make these returns significant.