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What a marketing submarine! [0] Let me count the vastly more transformational and earlier quantitative funds just off the top of my head: Princeton Newport, Co

What a marketing submarine! [0] Let me count the vastly more transformational and earlier quantitative funds just off the top of my head: Princeton Newport, Commodities Corporation, Tudor, RenTech, Chicago Research; hell even Soros and the Tigers were more influential and just as quantitative. DE Shaw was an early mover for certain kinds of automated trading, but if he had never met Nunzio Tartaglia (and basically stole his secret sauce -hey at least they mentioned Morgan Stanley), he'd still be writing shitty papers on parallel computing models at Columbia. He got lucky, and was able to take advantage of his luck, but he is also a garbage human being who has made the world worse[1][2]. His company once offered me a job: I told them to go fuck themselves, and the only better "no" decision I made was saying no to Bear Stearns in 2006. [0] http://paulgraham.com/submarine.html http://paulgraham.com/submarine.html [1]https://nymag.com/intelligencer/2019/09/david-e-shaw-college-donations.html https://nymag.com/intelligencer/2019/09/david-e-shaw-college... [2]https://www.propublica.org/article/hedge-fund-billionaires-donations-college-admissions-elite-universities https://www.propublica.org/article/hedge-fund-billionaires-d...

harryh 6y ago
re [1][2]: It's not clear to me how donating 10s of millions of dollars to prestigious universities in order to secure a grand total of 2 spots for his kids has made the world worse.
- scottlocklin 6y ago
  You know, if you're going to make a comment on links, you should really read the damn things. Do you think faking achievement in your (apparently useless) crotch fruit offspring is acceptable behavior? Do you think forcing your underlings to use hand signals to communicate with you in case you're on the phone with the Dalai Lama is reasonable behavior for a member of the human race? Did you read about how he treats the help? "Those who didn’t measure up suffered the consequences. Meriwether, who joined Shaw staff as a 22-year-old Yale graduate, was fired after forgetting to put snacks — bottled water and Asian pears sliced a quarter of an inch thick — into the car that picked the children up from school, according to two people familiar with the incident." Shaw is human refuse. No amount of accumulated money or bribery will ever change that.
  - trhway 6y ago
    A Yale graduate going for a job of packing snack just to be near a rich and powerful because that is how one climbs to the top...
- kaesar14 6y ago
  Helping perpetuate a system that deepens inequality and is a waste of money.
  - sokoloff 6y ago
    In the scheme of inequality, his kids attending any specific university is possibly less than a rounding error. Disclaimer: I worked at a DESCo company from 1997-1999
  - stale2002 6y ago
    On the contrary, a donation of 10s of millions of dollars allows more people to go to those universities, not less, and actually helps reduce inequality, by increasing the amount of people who can go to these places.
    - lotsofpulp 6y ago
      A donation does. But paying a university for admission for your children isn't a donation.
      - stale2002 6y ago
        You are engaging in a not useful sematics argument. Money coming from that is still money. And 10s of millions of dollars being paid to the university would still allow them to fund more things, and accept more people.
- lotsofpulp 6y ago
  It’s clear to me that the message that a sufficient amount of money let’s you subvert the rules weakens trust in society and increases justification for an every man for himself strategy.
  - dehrmann 6y ago
    Seems like it just weakens the reputation of these universities. It'd be nice if someone like US World and News Report made a public point of dinging schools doing some of these things.
    - lotsofpulp 6y ago
      The reputation of the top universities are already a place where the talented and motivated can mix with the well funded. All of this is well known in the circles that it matters in. You want your kids to mingle with the best and brightest, or the most well funded, as both traits provide enormous utility.
  - akarma 6y ago
    Subverting the rules doesn’t equate to making the world worse. Assuming just $10m for 2 of his children to be admitted? That’s enough to fully fund the education of ~50 low-income students [1]. I personally believe we should turn these quiet donations into a public bidding process instead to maximize what colleges can receive and ensure it’s done in as fair of a way as possible, but that’s separate. [1] It’s important to distinguish that the donations went to the university, not a corrupt official at the university. This is actually productive.
    - FiberBundle 6y ago
      Those two spots could have gone to students who actually were more qualified and talented. If this is done on a large scale many gifted students cannot get the education they deserve and need, so the world loses out on lots of talents hence making the world worse.
    - Rotten194 6y ago
auntienomen 6y ago
Yeah, that's some nice marketing. Tangentially: I've heard that Nunzio Tartaglia -- despite the astrophysics background -- was basically a banker installed by MS to keep a leash on the quants at APT. He took over, pissed off Bamberger, and that set off the stat arb diaspora.
- TuringNYC 6y ago
  Is there a good book of history on this? I read a bit about it on the Barton Biggs' book Hedgehogging, but there were only two chapters. I feel like Process Driven Trading Partners must have some great stories that can fill multiple books.
  - auntienomen 6y ago
    APT, not PDT. PDT also began as part of Morgan Stanley, but it didn't come along until much later. I don't know of any book.
  - ericjang 6y ago
    "The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution" discusses the lineage of Shaw, Tartaglia, and his predecessors briefly. I think some more academic texts on Pairs Trading and Stat Arb will mention the PDT team as well.
    - faizshah 6y ago
      The only other book that covers this as far as I know is The Quants by Patterson.
      - scottlocklin 6y ago
        Ed Thorp talks about it a little. https://www.valuewalk.com/2016/09/1850840/ https://www.valuewalk.com/2016/09/1850840/
pinewurst 6y ago
Also remember that Shaw’s main metric for “elite” is one’s SAT scores, regardless of one’s age, skills, or experience. It’s sort of amazing that Bezos didn’t continue this at Amazon.
- sokoloff 6y ago
  I still remember having to answer what my SAT scores for my DESCo job in 1997. It was odd, but I have to say that I loved working at DESCo and even our 10th percentile strongest colleagues would likely have been considered strong at most places. It is far and away the place where I had the most uniformly strong colleagues. Our receptionist, office manager, and lead recruiter (for a small satellite office) all had PhDs from very well-regarded universities. It was crazy.
  - fractionalhare 6y ago
    I am happy to hear you enjoyed working there, but personally I consider it a failure of recruiting to hire PhDs for reception and office management. I can see a vague case for the lead recruiter to have one if they're recruiting PhDs, I guess, but even that seems like overkill.
    - rmrfstar 6y ago
      It's a branding strategy. The psychology of Veblen goods is fascinating. See example below. "Things changed in the 1960s, with McKinsey leading the way. In 1965 and 1966, the firm placed help-wanted ads in The New York Times and Time magazine, with the goal of generating applications that it could then reject, to establish its own eliteness." https://www.theatlantic.com/ideas/archive/2020/02/how-mckinsey-destroyed-middle-class/605878/ https://www.theatlantic.com/ideas/archive/2020/02/how-mckins...
      - bobwernstein 6y ago
        If you need ads to attract applicants in the first place then you're the opposite of elite. Your lobby should be stocked 24/7 with hungry applicants without you even having a brand presence. That's elite.
hhs 6y ago
That essay [0] was neat, wonder if there’s a database that keeps track of PR firms and the articles written from different journalists/newspapers to study marketing submarine?
- scottlocklin 6y ago
  I would be delighted to help if you want to write one.
  - hhs 6y ago
    Thanks, this seems like an important phenomenon, someone must be studying this somewhere, wonder if there are other terms or phrases used to explain this? Would this fall into puff pieces? https://en.wikipedia.org/wiki/Puffery https://en.wikipedia.org/wiki/Puffery
    - scottlocklin 6y ago
      In 2016 there were 5 PR firms for every reporter [1]. Really that means there were 50 PR firms for every reporter (most of whom work for PR firms). Really, the easy thing to do is count the honest reporters using graph theory or whatnot. We can do this. There really are not that many. If I am not for myself, who is for me? When I am for myself, what am I? If not now, when? (Pirkei Avot 1:14) [1] https://www.ragan.com/there-are-now-nearly-5-pr-pros-for-every-reporter/ https://www.ragan.com/there-are-now-nearly-5-pr-pros-for-eve...
nsoonhui 6y ago
> but if he had never met Nunzio Tartaglia (and basically stole his secret sauce -hey at least they mentioned Morgan Stanley) I always have my skepticism when I heard of "he stole my source code" kind of complaints. If you were so good and you invented the whole thing, and he was so bad that he had to "steal your source code" in order to just get started at the time you were already ahead in the game, why can't you beat him?
- scottlocklin 6y ago
  I'll tell you what; just say the words "Nunzio Tartaglia" in front of that bag of pus and see what happens. I'll make a nice side bet to a charity of your choice if you video tape the evidence.
- thatcat 6y ago
  Capital networking any number of factors unrelated to the tech, this is a common theme in historical invention.
Reelin 6y ago
> he is also a garbage human being who has made the world worse His company went on to create Anton and actively pursues computational chemistry and drug design research. To me, that's an active (and expensive!) attempt to improve the world. The extent of your bitterness towards him seems wholly unjustified to me.
- qserasera 6y ago
  I suppose you could question how the current state of pharma is geared toward creating a better world beyond creating high quality well established products. In my opinion drug design to treating illness ect will likely undergo multiple paragdim shifts that will shift beyond chemistry and blend into immunology, nanotech ect.
ackbar03 6y ago
I actually see shaw as a bit of a hero, since he basically made his money, said something along the lines of "finance is stupid", and then took all that money and started working on biochemical problems that actually solve real life medical issues. Is he eccentric? Sure but so are a lot of the other wall street elit types, many of which have much less real contributions to the world. So not sure where all this hate is coming from
atlgator 6y ago
Jeff Bezos also came from DE Shaw.
TrackerFF 6y ago
re [1]: While I do understand why they are willing to shell out tens of millions for good spots for undergrad, it also makes me ask: Why not just let them to to wherever they can get, on their own accord, and then just help them to land whatever jobs they can. Surely, if you're the kid of Shaw, you: A) Are driven and disciplined enough to get into some Top 20 school on your own - especially with all the private tutoring and what not. B) Will be able to land whatever prestigious white-collar job through connections. And from there, getting accepted to some prestigious B-School is a lot easier. Sure, I understand that they want to minimize risks because they value education - but I also have a feeling that it comes down to bragging rights. But still...you can do a LOT for that kind of money.

harryh 6y ago

re [1][2]: It's not clear to me how donating 10s of millions of dollars to prestigious universities in order to secure a grand total of 2 spots for his kids has made the world worse.

scottlocklin 6y ago
You know, if you're going to make a comment on links, you should really read the damn things. Do you think faking achievement in your (apparently useless) crotch fruit offspring is acceptable behavior? Do you think forcing your underlings to use hand signals to communicate with you in case you're on the phone with the Dalai Lama is reasonable behavior for a member of the human race? Did you read about how he treats the help? "Those who didn’t measure up suffered the consequences. Meriwether, who joined Shaw staff as a 22-year-old Yale graduate, was fired after forgetting to put snacks — bottled water and Asian pears sliced a quarter of an inch thick — into the car that picked the children up from school, according to two people familiar with the incident." Shaw is human refuse. No amount of accumulated money or bribery will ever change that.
- trhway 6y ago
  A Yale graduate going for a job of packing snack just to be near a rich and powerful because that is how one climbs to the top...
kaesar14 6y ago
Helping perpetuate a system that deepens inequality and is a waste of money.
- sokoloff 6y ago
  In the scheme of inequality, his kids attending any specific university is possibly less than a rounding error. Disclaimer: I worked at a DESCo company from 1997-1999
- stale2002 6y ago
  On the contrary, a donation of 10s of millions of dollars allows more people to go to those universities, not less, and actually helps reduce inequality, by increasing the amount of people who can go to these places.
  - lotsofpulp 6y ago
    A donation does. But paying a university for admission for your children isn't a donation.
    - stale2002 6y ago
      You are engaging in a not useful sematics argument. Money coming from that is still money. And 10s of millions of dollars being paid to the university would still allow them to fund more things, and accept more people.
lotsofpulp 6y ago
It’s clear to me that the message that a sufficient amount of money let’s you subvert the rules weakens trust in society and increases justification for an every man for himself strategy.
- dehrmann 6y ago
  Seems like it just weakens the reputation of these universities. It'd be nice if someone like US World and News Report made a public point of dinging schools doing some of these things.
  - lotsofpulp 6y ago
    The reputation of the top universities are already a place where the talented and motivated can mix with the well funded. All of this is well known in the circles that it matters in. You want your kids to mingle with the best and brightest, or the most well funded, as both traits provide enormous utility.
- akarma 6y ago
  Subverting the rules doesn’t equate to making the world worse. Assuming just $10m for 2 of his children to be admitted? That’s enough to fully fund the education of ~50 low-income students [1]. I personally believe we should turn these quiet donations into a public bidding process instead to maximize what colleges can receive and ensure it’s done in as fair of a way as possible, but that’s separate. [1] It’s important to distinguish that the donations went to the university, not a corrupt official at the university. This is actually productive.
  - FiberBundle 6y ago
    Those two spots could have gone to students who actually were more qualified and talented. If this is done on a large scale many gifted students cannot get the education they deserve and need, so the world loses out on lots of talents hence making the world worse.
  - Rotten194 6y ago

auntienomen 6y ago

Yeah, that's some nice marketing. Tangentially: I've heard that Nunzio Tartaglia -- despite the astrophysics background -- was basically a banker installed by MS to keep a leash on the quants at APT. He took over, pissed off Bamberger, and that set off the stat arb diaspora.

TuringNYC 6y ago
Is there a good book of history on this? I read a bit about it on the Barton Biggs' book Hedgehogging, but there were only two chapters. I feel like Process Driven Trading Partners must have some great stories that can fill multiple books.
- auntienomen 6y ago
  APT, not PDT. PDT also began as part of Morgan Stanley, but it didn't come along until much later. I don't know of any book.
- ericjang 6y ago
  "The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution" discusses the lineage of Shaw, Tartaglia, and his predecessors briefly. I think some more academic texts on Pairs Trading and Stat Arb will mention the PDT team as well.
  - faizshah 6y ago
    The only other book that covers this as far as I know is The Quants by Patterson.
    - scottlocklin 6y ago
      Ed Thorp talks about it a little. https://www.valuewalk.com/2016/09/1850840/ https://www.valuewalk.com/2016/09/1850840/

pinewurst 6y ago

Also remember that Shaw’s main metric for “elite” is one’s SAT scores, regardless of one’s age, skills, or experience. It’s sort of amazing that Bezos didn’t continue this at Amazon.

sokoloff 6y ago
I still remember having to answer what my SAT scores for my DESCo job in 1997. It was odd, but I have to say that I loved working at DESCo and even our 10th percentile strongest colleagues would likely have been considered strong at most places. It is far and away the place where I had the most uniformly strong colleagues. Our receptionist, office manager, and lead recruiter (for a small satellite office) all had PhDs from very well-regarded universities. It was crazy.
- fractionalhare 6y ago
  I am happy to hear you enjoyed working there, but personally I consider it a failure of recruiting to hire PhDs for reception and office management. I can see a vague case for the lead recruiter to have one if they're recruiting PhDs, I guess, but even that seems like overkill.
  - rmrfstar 6y ago
    It's a branding strategy. The psychology of Veblen goods is fascinating. See example below. "Things changed in the 1960s, with McKinsey leading the way. In 1965 and 1966, the firm placed help-wanted ads in The New York Times and Time magazine, with the goal of generating applications that it could then reject, to establish its own eliteness." https://www.theatlantic.com/ideas/archive/2020/02/how-mckinsey-destroyed-middle-class/605878/ https://www.theatlantic.com/ideas/archive/2020/02/how-mckins...
    - bobwernstein 6y ago
      If you need ads to attract applicants in the first place then you're the opposite of elite. Your lobby should be stocked 24/7 with hungry applicants without you even having a brand presence. That's elite.

hhs 6y ago

That essay [0] was neat, wonder if there’s a database that keeps track of PR firms and the articles written from different journalists/newspapers to study marketing submarine?

scottlocklin 6y ago
I would be delighted to help if you want to write one.
- hhs 6y ago
  Thanks, this seems like an important phenomenon, someone must be studying this somewhere, wonder if there are other terms or phrases used to explain this? Would this fall into puff pieces? https://en.wikipedia.org/wiki/Puffery https://en.wikipedia.org/wiki/Puffery
  - scottlocklin 6y ago
    In 2016 there were 5 PR firms for every reporter [1]. Really that means there were 50 PR firms for every reporter (most of whom work for PR firms). Really, the easy thing to do is count the honest reporters using graph theory or whatnot. We can do this. There really are not that many. If I am not for myself, who is for me? When I am for myself, what am I? If not now, when? (Pirkei Avot 1:14) [1] https://www.ragan.com/there-are-now-nearly-5-pr-pros-for-every-reporter/ https://www.ragan.com/there-are-now-nearly-5-pr-pros-for-eve...

nsoonhui 6y ago

> but if he had never met Nunzio Tartaglia (and basically stole his secret sauce -hey at least they mentioned Morgan Stanley) I always have my skepticism when I heard of "he stole my source code" kind of complaints. If you were so good and you invented the whole thing, and he was so bad that he had to "steal your source code" in order to just get started at the time you were already ahead in the game, why can't you beat him?

scottlocklin 6y ago
I'll tell you what; just say the words "Nunzio Tartaglia" in front of that bag of pus and see what happens. I'll make a nice side bet to a charity of your choice if you video tape the evidence.
thatcat 6y ago
Capital networking any number of factors unrelated to the tech, this is a common theme in historical invention.

Reelin 6y ago

> he is also a garbage human being who has made the world worse His company went on to create Anton and actively pursues computational chemistry and drug design research. To me, that's an active (and expensive!) attempt to improve the world. The extent of your bitterness towards him seems wholly unjustified to me.

qserasera 6y ago
I suppose you could question how the current state of pharma is geared toward creating a better world beyond creating high quality well established products. In my opinion drug design to treating illness ect will likely undergo multiple paragdim shifts that will shift beyond chemistry and blend into immunology, nanotech ect.

ackbar03 6y ago

I actually see shaw as a bit of a hero, since he basically made his money, said something along the lines of "finance is stupid", and then took all that money and started working on biochemical problems that actually solve real life medical issues. Is he eccentric? Sure but so are a lot of the other wall street elit types, many of which have much less real contributions to the world. So not sure where all this hate is coming from

atlgator 6y ago

Jeff Bezos also came from DE Shaw.

TrackerFF 6y ago

re [1]: While I do understand why they are willing to shell out tens of millions for good spots for undergrad, it also makes me ask: Why not just let them to to wherever they can get, on their own accord, and then just help them to land whatever jobs they can. Surely, if you're the kid of Shaw, you: A) Are driven and disciplined enough to get into some Top 20 school on your own - especially with all the private tutoring and what not. B) Will be able to land whatever prestigious white-collar job through connections. And from there, getting accepted to some prestigious B-School is a lot easier. Sure, I understand that they want to minimize risks because they value education - but I also have a feeling that it comes down to bragging rights. But still...you can do a LOT for that kind of money.