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The top quant funds perform exceptionally well even through bear markets. That's a fact and a matter of public record. Likewise the funds which rely on alternat

The top quant funds perform exceptionally well even through bear markets. That's a fact and a matter of public record. Likewise the funds which rely on alternative data the most aren't even primarily quantitative in their strategies, so you shouldn't be grouping them together. I don't know where you worked, but please stop perpetuating the myth that everything in finance is shady business in smoky rooms. Contrary to what you're saying, a lot of the alpha generated at the best firms comes from novel approaches to data analysis, not the uniqueness of the data itself. There is real ingenuity in research which translates into consistent alpha. I'm not going to argue it's literally the maximally valuable way to generate returns in finance, but you're dismissing it entirely. Not everything in trading is relationship building and trying to curate data no one else has. There is room to combine otherwise public datasets together to find novel insights, and this is frequently done.

gamblor956 7y ago
The top quant firms also get a fair amount of internal corporate data that lets them properly populate their models. Every model has significant biases and weaknesses. If a model survives more than one up or down cycle, it's generally a sign that the model is based on leaked data and not on the actual analytic prowress of the firm involved.
- throwawaymath 7y ago
  Sure, individual models are transitory and don't last very long (relatively speaking). But I'm also not debating that point.
throwno 7y ago
>The top quant funds perform exceptionally well even through bear markets. Oh, you mean like LTCM?
- throwawaymath 7y ago
  No, I mean places like RenTech and TGS. But I'll humor your implied point: LCTM's failings have nothing to do with the core thesis I'm rebutting, which is that the only value in financial trading is provided by shady backroom dealings.
  - throwno 7y ago
    I'm not as cynical as that guy. I don't think quants are a "scam" or whatever. However, I do think the the top funds represent survivorship bias. Everybody's a top fund, until they aren't. As for RenTech, the fact that Simons stepped down in 2008 says maybe things weren't all so rosy behind closed doors.
    - auntienomen 7y ago
      You're suggesting that Simons was forced out? By who? He owns the company.
    - deepnotderp 7y ago
      LTCM died due to extreme leverage on low liquidity assets And Simons is 81 years old...
codingslave 7y ago
Sure the quant funds make money, a few people do well, lots of engineers make 500k. Places like Pimco, Goldman, Baupost Group, Fidelity, etc. the traditional finance firms work differently. For example, the bond market which is massive compared to equities, was rigged like 30 years ago by Goldman and Pimco to stop computerized trading of corporate bonds. What this did was keep the bond trading in the hands of a few firms, the tops of whom all pay themselves 10-50 million a year. Equities is being run over by ETFs, none of these funds have that much alpha, HFT was just some stupid inefficiency firms realized that could do in like 2008, by 2019, HFT is barely profitable. Whenever these firms make money from fast trading, what they are really doing is stealing money from pension funds and peoples 401ks. Clipping and front running trades shaves a little from the price and puts it into the pocket of some "genius" at Two Sigma. You can shout all you want about how intelligent these people are, but the whole thing is crooked. Secondly, watch how fast these places go out of business when the market tanks. Massive bull runs and "prestige" have these guys claiming to be kings of the world, but really, the financial industry is about raising a ton of investment money and figuring out how these fund managers can siphon it off into their own pockets. Which is why ETFs are so popular now. When Two Sigma starts making too much money, the sec starts knocking on their door. Because its obvious theyre exploiting the market and extracting wealth. So they dial it back, and keep just some. This kind of thing is never talked about in public, but it happens all the time. Constant negotiation between which trades are ethical between computerized traders and the US government. All that 50 Billion in wealth really came from Goldman. Go look on linkedin, all the top people there jump between TS and Goldman. I could go on and on about the scam of quant, I know the industry intimately.
- moneywoes 7y ago
  Where can I learn more? If ETFs are scam than what isn't?
  - codingslave 7y ago
    ETFs arent a scam. You should buy them
- darawk 7y ago

gamblor956 7y ago

The top quant firms also get a fair amount of internal corporate data that lets them properly populate their models. Every model has significant biases and weaknesses. If a model survives more than one up or down cycle, it's generally a sign that the model is based on leaked data and not on the actual analytic prowress of the firm involved.

throwawaymath 7y ago
Sure, individual models are transitory and don't last very long (relatively speaking). But I'm also not debating that point.

throwno 7y ago

>The top quant funds perform exceptionally well even through bear markets. Oh, you mean like LTCM?

throwawaymath 7y ago
No, I mean places like RenTech and TGS. But I'll humor your implied point: LCTM's failings have nothing to do with the core thesis I'm rebutting, which is that the only value in financial trading is provided by shady backroom dealings.
- throwno 7y ago
  I'm not as cynical as that guy. I don't think quants are a "scam" or whatever. However, I do think the the top funds represent survivorship bias. Everybody's a top fund, until they aren't. As for RenTech, the fact that Simons stepped down in 2008 says maybe things weren't all so rosy behind closed doors.
  - auntienomen 7y ago
    You're suggesting that Simons was forced out? By who? He owns the company.
  - deepnotderp 7y ago
    LTCM died due to extreme leverage on low liquidity assets And Simons is 81 years old...

codingslave 7y ago

Sure the quant funds make money, a few people do well, lots of engineers make 500k. Places like Pimco, Goldman, Baupost Group, Fidelity, etc. the traditional finance firms work differently. For example, the bond market which is massive compared to equities, was rigged like 30 years ago by Goldman and Pimco to stop computerized trading of corporate bonds. What this did was keep the bond trading in the hands of a few firms, the tops of whom all pay themselves 10-50 million a year. Equities is being run over by ETFs, none of these funds have that much alpha, HFT was just some stupid inefficiency firms realized that could do in like 2008, by 2019, HFT is barely profitable. Whenever these firms make money from fast trading, what they are really doing is stealing money from pension funds and peoples 401ks. Clipping and front running trades shaves a little from the price and puts it into the pocket of some "genius" at Two Sigma. You can shout all you want about how intelligent these people are, but the whole thing is crooked. Secondly, watch how fast these places go out of business when the market tanks. Massive bull runs and "prestige" have these guys claiming to be kings of the world, but really, the financial industry is about raising a ton of investment money and figuring out how these fund managers can siphon it off into their own pockets. Which is why ETFs are so popular now. When Two Sigma starts making too much money, the sec starts knocking on their door. Because its obvious theyre exploiting the market and extracting wealth. So they dial it back, and keep just some. This kind of thing is never talked about in public, but it happens all the time. Constant negotiation between which trades are ethical between computerized traders and the US government. All that 50 Billion in wealth really came from Goldman. Go look on linkedin, all the top people there jump between TS and Goldman. I could go on and on about the scam of quant, I know the industry intimately.

moneywoes 7y ago
Where can I learn more? If ETFs are scam than what isn't?
- codingslave 7y ago
  ETFs arent a scam. You should buy them
darawk 7y ago