It's even worse in the case of hedge funds (well, arbitrage in general), because any given strategy has a maximum amount of profit it could make before the mark

It's even worse in the case of hedge funds (well, arbitrage in general), because any given strategy has a maximum amount of profit it could make before the market loses that specific inefficiency. Or at least, that's the theory. It's basically like finding a gold mine and telling everyone to come over and take what they want from it.