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I think the idea is that once someone figures out how to exploit it, others will soon.
by empath75 7y ago
I think the idea is that once someone figures out how to exploit it, others will soon.
- Tycho 7y agoBut I don't see why that would be true if we're talking about arcane patterns in data. Who's to say anyone's even looking at the same data, let alone the same pattern? If we were talking about intuitive patterns that map to logic and investor psychology, then sure, others will reliable stumble upon the same ideas. But if we're talking about unintuitive patterns in non-obvious datasets, the search space is far too big to assure that effect.
- thedudeabides5 7y agoSure, but isn't this as much an argument for efficient markets as anything. Literally hundreds of thousands of folks have died on the very hill Medallion is holding. The fact that there is just one firm with this track record is evidence that markets are pretty hard and relatively efficient. Whether markets are so perfectly efficient that no firm can really beat the market, well that just seems like a pretty academic and unhelpful question. You don't need some grand perfect market hypothesis to say 'man those returns look a bit too good to be true, what's really going on in there?"