4 ms·

FWIW, Jane Street is not a hedge fund nor take outside client money. (Edit: I work at Jane Street.)

• moneywoes 7y ago
  How would you best describe them
  • darawk 7y ago
    It's a prop trading firm. It's pretty important to distinguish between hedge funds that take public money (which are generally probably low quality, as the OP described) and prop trading firms that only or primarily trade their own money (Two Sigma, Renaissance, Jane Street, Jump trading, etc.). The latter deserve their mystique, because you only trade your own money if you are actually beating the market.
    • HereBePandas 7y ago
      Two Sigma and Renaissance (albeit not Medallion) primarily invest outside capital.
      • darawk 7y ago
        Renaissance does take outside capital, but their primary business is Medallion. The outside capital is just a way to make a bit more by trading on their reputation. Two Sigma does generate a bit more revenue from outside capital than Renaissance, but it is my understanding that the heart of their business is still prop trading. But I don't know that for certain.
    • amelius 7y ago
      Can you comment on relevance for society? Do these companies generate a net positive, or do they only extract value? I.e. should I look for a job there only because of the money, or also because I can make a difference somehow in the bigger societal picture?
      • wjnc 7y ago
        Difficult question, at least if you'd try to argue without politicizing too much. I'd say it's a false dichotomy to equate 'making money on the stock market on your own investments' with '(negatively) extracting value'. On the whole of it I'd argue that the existence of a stock market is a public good since it makes capital more liquid, more accessible and more transparent. Going from that to argue that firms that invest purely for themselves deliver a whole lot of positive externalities would be hard for me. I'd call it Lawful-Neutral. It's wholly within the rules of society, doesn't create very clear negatives and clearly delivers positives for those involved (employees, stockholders, etc.). If you have a 'millenial mindset' and want to work where you directly and positively impact society, I'd choose elsewhere. From a Peter Singer-like perspective, if you'd earn top dollar there and spend at least a modest amount giving to the right charities, you might still be making the world a better place, even compared to the other place.
        • amelius 7y ago
          I'd maybe agree with your points, except the last point: if these traders keep all/most smart people from the job market, then even your dollars would not make a difference. Of course this is overblown but it is similar to the concern that "all of our smart people are trying to make people click ads".
          • darawk 7y ago
            I think the way to think about it is that this "make people click on ads" problem needs to be solved. Just like this "value assets efficiently" problem needs to be solved. And if you can contribute to solving either problem more efficiently, that frees up the next smartest person to do something more directly productive.
            • amelius 7y ago
              No, because how do you solve a problem better than with one smart person? The answer is with two smart people. And from there you get an endless race using more smart people to solve pointless problems.
  • nailer 7y ago
    They trade their own money instead of OPM