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You have absolutely no idea what you’re talking about. RenTec is the most profitable money making machine the world has ever seen (and likely will see). RenTec’
by mruts 7y ago
You have absolutely no idea what you’re talking about. RenTec is the most profitable money making machine the world has ever seen (and likely will see). RenTec’s Medallion fund has an annualized return for over 30 years in excess of 35% net of fees. I’m not sure what their management fee is, but their performance fee is like 45%. This means they are making like 80% returns YoY before fees.
I suspect you don’t work in the industry, because what you’re saying is absolutely ludicrous. The S&P 500 lost like 40% in 2008. Meanwhile Medallion doubled up after fees. So a total return of 145%. What you’re saying is simply not possible with a tax loophole.
There’s not a single hedge fund analyst or PM on the Street who doesn’t think that RenTec is anything less than amazing. No one thinks they are as good as those guys, no one. If you want the real story about Simmons and RenTec, check out the MIT Sloan fireside chat with him on YouTube.
- tim333 7y agoThis is another reason individual day traders lose - it's a zero sum game and in liquid markets you are competing against outfits like RenTec.
- mruts 7y agoBeta (by definition) is not a zero sum game, but alpha is.
- RandomBacon 7y agoI'm not in the industry, but I wonder: did people have the same kind of reverence for Madoff?
- ivalm 7y agoMadoff was a ponzi scheme that relied on new investment (since it was simple pyramid). Medallion fund limits outside investment (so there is no outside source of money) and has operated for many decades (ie more money was withdrawn from it than put in).
- esmi 7y agoI know nothing of Medallion, but I'm curious if only private insiders can invest, how do you know they're not just lying about how much they return?
- ivalm 7y agoIt allows family and former employees, so it is actually A LOT of people. Kind of hard to keep a conspiracy with 100+ people for 30+ years. Why would all these people lie?
- rwmurrayVT 7y agoAll the family, employees, and former employees have a maximum investment. Every year they withdraw funds so that the principle never exceeds a certain threshold.
- tcbawo 7y agoSuch returns would not be possible if they grew to a certain size. By closing the fund, they can keep it small enough to limit scaling issues.
- imtringued 7y agoThat's illogical because people don't get paid in ROI. They get paid in absolute dollars. Earning a 30% ROI on 200 billion dollars is better than earning a 30% ROI on 100 billion dollars.
- tcbawo 7y agoMy point is that once a fund grows to a certain size, ROI at that scale becomes impossible. I wouldn't be surprised to learn that some of their funds have investment restrictions and mandatory distributions.
- ivalm 7y agoBut they do have other funds. It's simply they want to keep their money in higher return fund and other people's money in the bigger, lower return fund.
- imtringued 7y agoYou can't just conjure a 45% ROI out of nothing. It either means inflation is incredibly high, productivity growth is incredibly high, there is some exotic "dark market" that most investors cannot access (probably made out of dark matter) or other people are losing a lot of money. Except inflation isn't high, productivity growth isn't high and I just made up the "dark market" so only one explanation remains.
- mruts 7y agoLike they’re very very good at what they do? Simmons is a genius ans the people that work st RenTec are some of the best and brightest minds in the world. Even so, I must admit, their profability and success is outstanding. But then again, so are Apple’s and Google’s. The only difference is thst no one knows how RenTec makes buttloads of money.