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So, they tried a whole bunch of things, and even with the benefit of that lookforward bias, their final strategy still underperformed the S&P? Color me unimpres

So, they tried a whole bunch of things, and even with the benefit of that lookforward bias, their final strategy still underperformed the S&P? Color me unimpressed. Edit: I looked at their site and it's clear that their business model is just to gather assets to charge fees on. Which is why they've developed strategies like Inverse Cramer, Pelosi Tracker, WallStreetBets -- these strategies don't have any alpha, they're just designed to catch the eye of retail traders. Also this scumbaggery, from their website: "$70M+ Assets Committed*" Then way at the bottom: "* = "Assets committed" refers to captured user behavior in attempted investments and not to assets being actively managed."

vampiretooth1 5y ago
I'd familiarize myself with overfitting (https://www.investopedia.com/terms/o/overfitting.asp https://www.investopedia.com/terms/o/overfitting.asp). That's optimizing your portfolio to historical data so much so that it is no longer generalizable to the future.
- ProjectArcturis 5y ago
  I'm well aware of overfitting, but it seems that these folks are not.
tstewart314 5y ago
Hey! One of the founders here. We're a recently launched roboadvisor explicitly for "high risk investing" and we develop these portfolios to make it easy to take advantage of more exotic strategies for those without the financial or technical knowledge to do it themselves (while providing tons of data, transparency, and recommendations). This blog post is a fun strategy poking fun at the recent popularity of "Inversing Cramer" and our own spin on it. Note that this isn't a live portfolio on our site. For these more fun ones (WallStreetBets, Nancy Pelosi) - these are specifically requested from our clients and we provide extensive data and recommendations to suggest portfolios to clients based on their situation. You can see for yourself: the WallStreetBets portfolio is down nearly 40%. Nancy Pelosi is flat - we don't hide that at all and instead make it very clear with large font. Our most popular strategy (pulls the most AUM) is the Quantbase Leverage Flagship, a portfolio based on this paper[0] with nearly 100 years of performance history. Yes we charge a fee on AUM. All robo-advisors do. This aligns incentives: we make (more) money only when you do. We're not for everyone, and even for those we are for we recommend on our front page to limit investment to a fraction of your total portfolio, but the thesis we believe in is solid: you can improve your absolute returns by taking a higher level of risk. We make it easier to do that intelligently, with proper data, and with the proper risk management. Happy to answer any other questions. [0]: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2741701 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2741701 Edit: added "more" to clarify the AUM fee incentives alignment.
- ProjectArcturis 5y ago
  >Yes we charge a fee on AUM. All robo-advisors do. This aligns incentives: we make money only when you do. This is absolutely false. You charge a 0.94% management fee. That fee gets paid whether or not customers' portfolios go up.
  - tstewart314 5y ago
    We can't charge performance-based fees as much as we'd like to with mass retail clients, according to the SEC[0]. Not charging except when a client portfolio beats a benchmark or profits counts too. AUM fees are considered by the SEC to be the best way to align incentives between advisors and clients. Furthermore, up to this point, we've been completely free for current clients to ensure we're providing value before charging anything. At the same time, we charge a fraction of the fees vs other "high-performance" oriented managed alternatives: Grayscale at 2%, Titan at 1%, typical hedge fund 2/20, etc We're VC-backed, SEC-registered, our goal at the end of the day here isn't a quick cash grab, it's to be a long-standing, sustainable, valuable experience for clients in a space (high risk investing) that currently lacks exactly those things. (and by the way: an AUM fee is just about the slowest way one could "cash grab", decades-old robo-advisors are barely profitable with it. It's not a high-margin business at all). [0]: https://www.sec.gov/rules/other/2021/ia-5733.pdf https://www.sec.gov/rules/other/2021/ia-5733.pdf
    - kjs3 5y ago
      So...still false.
- deleted 5y ago
  [deleted]
faangiq 5y ago
No dude. Zoomlennials are disrupting the market with their apps and TikTok ads. Because.

vampiretooth1 5y ago

I'd familiarize myself with overfitting (https://www.investopedia.com/terms/o/overfitting.asp https://www.investopedia.com/terms/o/overfitting.asp). That's optimizing your portfolio to historical data so much so that it is no longer generalizable to the future.

ProjectArcturis 5y ago
I'm well aware of overfitting, but it seems that these folks are not.

tstewart314 5y ago

Hey! One of the founders here. We're a recently launched roboadvisor explicitly for "high risk investing" and we develop these portfolios to make it easy to take advantage of more exotic strategies for those without the financial or technical knowledge to do it themselves (while providing tons of data, transparency, and recommendations). This blog post is a fun strategy poking fun at the recent popularity of "Inversing Cramer" and our own spin on it. Note that this isn't a live portfolio on our site. For these more fun ones (WallStreetBets, Nancy Pelosi) - these are specifically requested from our clients and we provide extensive data and recommendations to suggest portfolios to clients based on their situation. You can see for yourself: the WallStreetBets portfolio is down nearly 40%. Nancy Pelosi is flat - we don't hide that at all and instead make it very clear with large font. Our most popular strategy (pulls the most AUM) is the Quantbase Leverage Flagship, a portfolio based on this paper[0] with nearly 100 years of performance history. Yes we charge a fee on AUM. All robo-advisors do. This aligns incentives: we make (more) money only when you do. We're not for everyone, and even for those we are for we recommend on our front page to limit investment to a fraction of your total portfolio, but the thesis we believe in is solid: you can improve your absolute returns by taking a higher level of risk. We make it easier to do that intelligently, with proper data, and with the proper risk management. Happy to answer any other questions. [0]: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2741701 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2741701 Edit: added "more" to clarify the AUM fee incentives alignment.

ProjectArcturis 5y ago
>Yes we charge a fee on AUM. All robo-advisors do. This aligns incentives: we make money only when you do. This is absolutely false. You charge a 0.94% management fee. That fee gets paid whether or not customers' portfolios go up.
- tstewart314 5y ago
  We can't charge performance-based fees as much as we'd like to with mass retail clients, according to the SEC[0]. Not charging except when a client portfolio beats a benchmark or profits counts too. AUM fees are considered by the SEC to be the best way to align incentives between advisors and clients. Furthermore, up to this point, we've been completely free for current clients to ensure we're providing value before charging anything. At the same time, we charge a fraction of the fees vs other "high-performance" oriented managed alternatives: Grayscale at 2%, Titan at 1%, typical hedge fund 2/20, etc We're VC-backed, SEC-registered, our goal at the end of the day here isn't a quick cash grab, it's to be a long-standing, sustainable, valuable experience for clients in a space (high risk investing) that currently lacks exactly those things. (and by the way: an AUM fee is just about the slowest way one could "cash grab", decades-old robo-advisors are barely profitable with it. It's not a high-margin business at all). [0]: https://www.sec.gov/rules/other/2021/ia-5733.pdf https://www.sec.gov/rules/other/2021/ia-5733.pdf
  - kjs3 5y ago
    So...still false.
deleted 5y ago
[deleted]

faangiq 5y ago

No dude. Zoomlennials are disrupting the market with their apps and TikTok ads. Because.