8 ms·

Why "sticking to the man" resonates with me, and why I took pleasure in this incident is because students from the mid-2000s realize that hedge fund managers fo

by sn41 6y ago

Why "sticking to the man" resonates with me, and why I took pleasure in this incident is because students from the mid-2000s realize that hedge fund managers for the most part are not as smart as they think they are. Their bungling significantly set back the dreams of several students of my generation. I am not far right by any means, just was far gone and sad for 2010-2015. I suspect that the truth is closer to "Wall Street" than we care to admit. Insider information is still the key, not stochastic differential equations, Ito's formula and portfolio balance theories. Melvin putting all their leveraged eggs in one basket is considered above board, and is not being questioned.

Tarq0n 6y ago
If insider information really is key you should able to easily provide evidence for that claim. The market moving before news is announced is something that the SEC monitors and has consequences when it happens.
- hi5eyes 6y ago
  Everyone’s seen the “consequences” like the ones Elon Musk faced after tweeting “funding secured”
- sn41 6y ago
  "Easily" is a subjective claim. You can read the congressional testimony of Harry Markopolos from the Madoff scandal, where he explicitly says that SEC is hobbled because regulators do not have the werewithal to attend these hob-nobbing conferences. I am not in the finance industry, so my sources can only be public documents. https://www.fraud-magazine.com/article.aspx?id=313 https://www.fraud-magazine.com/article.aspx?id=313
- deleted 6y ago
  [deleted]
smabie 6y ago
Yeah I think a lot of hedge funds are run by idiots. Market making firms however, they are the true stars. There are also some really good hedge funds: RenTec, Millennium, 2 Sigma, etc. A lot of hedge funds are dinosaurs and are slowly going extinct. Even in the last 5 years there has been a big shift: investors really prefer systematic firms and raising money for a discretionary fund gets harder and harder every day. I do not believe insider information is key. If it was, hedge fund risk adjusted returns would probably be less abysmal. It's not that straightforward to evaluate hf performance, but trust me when I say, there a lot of funds out there providing very dubious value to investors.

by sn41 6y ago

Tarq0n 6y ago

If insider information really is key you should able to easily provide evidence for that claim. The market moving before news is announced is something that the SEC monitors and has consequences when it happens.

hi5eyes 6y ago
Everyone’s seen the “consequences” like the ones Elon Musk faced after tweeting “funding secured”
sn41 6y ago
"Easily" is a subjective claim. You can read the congressional testimony of Harry Markopolos from the Madoff scandal, where he explicitly says that SEC is hobbled because regulators do not have the werewithal to attend these hob-nobbing conferences. I am not in the finance industry, so my sources can only be public documents. https://www.fraud-magazine.com/article.aspx?id=313 https://www.fraud-magazine.com/article.aspx?id=313
deleted 6y ago
[deleted]

smabie 6y ago

Yeah I think a lot of hedge funds are run by idiots. Market making firms however, they are the true stars. There are also some really good hedge funds: RenTec, Millennium, 2 Sigma, etc. A lot of hedge funds are dinosaurs and are slowly going extinct. Even in the last 5 years there has been a big shift: investors really prefer systematic firms and raising money for a discretionary fund gets harder and harder every day. I do not believe insider information is key. If it was, hedge fund risk adjusted returns would probably be less abysmal. It's not that straightforward to evaluate hf performance, but trust me when I say, there a lot of funds out there providing very dubious value to investors.