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I guess all the math and science PhDs they hire are actually undercover spies that finished their dissertations in order to provide a good cover?

by smabie 7y ago

Inconel 7y ago
Without getting into the validity of the gp’s post, RenTec does seem to recruit from NSA/CCR, particularly in the early days. Again, not saying this lends credence to the gp’s post, just adding an interesting bit of info.
- patentatt 7y ago
  A perfectly innocuous connection could be that intelligence community folks are good at ... drawing conclusions from intelligence? It makes sense to recruit spooks to analyze and interpret mounds of proprietary but legally-gathered intelligence then.
  - dredmorbius 7y ago
    NSA's core competence is signals, largely making and breaking ciphers. Intel analysis is more CIA/DIA. My understanding is that this was generally true in the 1960s-70s as well. E.g., MINARET: https://en.wikipedia.org/wiki/Project_MINARET https://en.wikipedia.org/wiki/Project_MINARET
- deepnotderp 7y ago
  RenTech recruited from NSA early on mostly due to Jim Simons' connections there. The recruiting they do nowadays is mostly because there are some excellent mathematicians, statisticians, information theorists, etc. there.
  - synaesthesisx 7y ago
    I have no doubt RenTech has some of the brightest out there. However, any consistently high-performing funds warrant suspicion, especially considering how many hedge funds engage in questionable activities (corporate espionage under the guise of "forensics", hacking, insider trading). Showtime's Billions isn't as far off from reality as people think.
patentatt 7y ago
Do you think there aren’t other highly educated smart people working anywhere else in the financial industry? They’re success can’t be explained by just hiring smart people.
- pmart123 7y ago
  You could say the same thing about Google and Facebook versus Twitter or Snapchat. Whatever strategies they did find and implement likely worked or were massively improved upon using the historic data the firm had on how to position quotes, what trades weren't liquidity constrained, what were the server response delays between exchanges, etc. Think about the quality between Google Maps and Apple Maps when Apple maps was first launched. Apple even hired a bunch of ex-Google Maps employees to improve their product, so it likely was using similar algorithms, but with worse data. Apple though had the luxury of gathering every iPhone user's location data though to build up their dataset. In Rentech's case, a competing hedge fund would not only have to build out the team and infrastructure, they would only likely lose a lot of money at first to gather enough data to have a similar edge. There were a lot of HFT firms like Jump, Citadel's unit, Getco that generated very impressive risk-adjusted returns for a while, but I don't believe it was close to Rentech in terms of capital capacity and number of years.
  - hogFeast 7y ago
    > You could say the same thing about Google and Facebook versus Twitter or Snapchat. You can't. Renaissance only hire ~100-150 people, their strategy is very much based on only hiring the best of the best. This is nothing like tech. Tech firms employ thousands of engineers, you have to employ average people if your demand is this high. Jump and Citadel aren't trying to do what RenTech does either (it is very hard and very risky). They do a lot of HFT, afaik Jump is just a market maker, so they are more like tech companies in that they do not need geniuses. They just need competent bodies at scale who won't blow up the company.
- govg 7y ago
  There's almost no firm with a bar to entry as high as Rentec when it comes to hiring, and almost certainly none with the amount of people who have cleared such a bar. Some smaller firms still hire similar quality, but RenTec has been around for so long and always has attracted the best candidates. It's not as simple as saying "they hire smart candidates" it's that they've hired the outright best in the market when possible.

I guess all the math and science PhDs they hire are actually undercover spies that finished their dissertations in order to provide a good cover?

by smabie 7y ago

I guess all the math and science PhDs they hire are actually undercover spies that finished their dissertations in order to provide a good cover?

Inconel 7y ago

Without getting into the validity of the gp’s post, RenTec does seem to recruit from NSA/CCR, particularly in the early days. Again, not saying this lends credence to the gp’s post, just adding an interesting bit of info.

patentatt 7y ago
A perfectly innocuous connection could be that intelligence community folks are good at ... drawing conclusions from intelligence? It makes sense to recruit spooks to analyze and interpret mounds of proprietary but legally-gathered intelligence then.
- dredmorbius 7y ago
  NSA's core competence is signals, largely making and breaking ciphers. Intel analysis is more CIA/DIA. My understanding is that this was generally true in the 1960s-70s as well. E.g., MINARET: https://en.wikipedia.org/wiki/Project_MINARET https://en.wikipedia.org/wiki/Project_MINARET
deepnotderp 7y ago
RenTech recruited from NSA early on mostly due to Jim Simons' connections there. The recruiting they do nowadays is mostly because there are some excellent mathematicians, statisticians, information theorists, etc. there.
- synaesthesisx 7y ago
  I have no doubt RenTech has some of the brightest out there. However, any consistently high-performing funds warrant suspicion, especially considering how many hedge funds engage in questionable activities (corporate espionage under the guise of "forensics", hacking, insider trading). Showtime's Billions isn't as far off from reality as people think.

patentatt 7y ago

Do you think there aren’t other highly educated smart people working anywhere else in the financial industry? They’re success can’t be explained by just hiring smart people.

pmart123 7y ago
You could say the same thing about Google and Facebook versus Twitter or Snapchat. Whatever strategies they did find and implement likely worked or were massively improved upon using the historic data the firm had on how to position quotes, what trades weren't liquidity constrained, what were the server response delays between exchanges, etc. Think about the quality between Google Maps and Apple Maps when Apple maps was first launched. Apple even hired a bunch of ex-Google Maps employees to improve their product, so it likely was using similar algorithms, but with worse data. Apple though had the luxury of gathering every iPhone user's location data though to build up their dataset. In Rentech's case, a competing hedge fund would not only have to build out the team and infrastructure, they would only likely lose a lot of money at first to gather enough data to have a similar edge. There were a lot of HFT firms like Jump, Citadel's unit, Getco that generated very impressive risk-adjusted returns for a while, but I don't believe it was close to Rentech in terms of capital capacity and number of years.
- hogFeast 7y ago
  > You could say the same thing about Google and Facebook versus Twitter or Snapchat. You can't. Renaissance only hire ~100-150 people, their strategy is very much based on only hiring the best of the best. This is nothing like tech. Tech firms employ thousands of engineers, you have to employ average people if your demand is this high. Jump and Citadel aren't trying to do what RenTech does either (it is very hard and very risky). They do a lot of HFT, afaik Jump is just a market maker, so they are more like tech companies in that they do not need geniuses. They just need competent bodies at scale who won't blow up the company.
govg 7y ago
There's almost no firm with a bar to entry as high as Rentec when it comes to hiring, and almost certainly none with the amount of people who have cleared such a bar. Some smaller firms still hire similar quality, but RenTec has been around for so long and always has attracted the best candidates. It's not as simple as saying "they hire smart candidates" it's that they've hired the outright best in the market when possible.