4 ms·

> As much as I find the insider trading narrative to be more plausible than any secret sauce I would be interested in hearing why you find it more plausible.

> As much as I find the insider trading narrative to be more plausible than any secret sauce I would be interested in hearing why you find it more plausible. I'll start. I find it less plausible because you actually go to jail for that.

n2d4 3y ago
If it's a secret sauce that is based on public information (aka not insider trading), then it's unlikely that no one else but this one company has discovered it. It's just extremely unlikely. Plus, plenty of "godlike investors" were clearly willing to do things that landed them in jail (SBF, Madoff, etc). Hiring as an edge makes a lot more sense. Quant trading is often not about a single strategy but about the sum of many small ones. And other quants that have been taking similar hiring approaches also had incredible success (eg. Jane Street, Citadel, Jump Trading, Optiver, etc). RenTec just has a reputation of being "the best", which in turn makes the best people more likely to join them, which again in turn makes RenTec better, like a vicious cycle. I also want to mention that in some years, there's a massive discrepancy between RenTec's internal Medallion fund (+76% in 2020), and its external funds (-19% to -31% in 2020). Not saying there is something to it (they never claimed using the same strategies), but it does seem at least a bit suspicious.
- sdfghswe 3y ago
  > Hiring as an edge makes a lot more sense. Quant trading is often not about a single strategy but about the sum of many small ones. And other quants that have been taking similar hiring approaches also had incredible success (eg. Jane Street, Citadel, Jump Trading, Optiver, etc). RenTec just has a reputation of being "the best", which in turn makes the best people more likely to join them, which again in turn makes RenTec better, like a vicious cycle. Weren't you meant to make the case for insider trading? This isn't insider trading. > I also want to mention that in some years, there's a massive discrepancy between RenTec's internal Medallion fund (+76% in 2020), and its external funds (-19% to -31% in 2020). Not saying there is something to it (they never claimed using the same strategies), but it does seem at least a bit suspicious. Are you telling me that the insiders keep the good stuff for themselves and the outsiders get fucked? I don't find that suspicious at all.
  - n2d4 3y ago
    I'm supporting dna_polymerase's point, that RenTec's edge is much more likely to be hiring smart people than insider trading and more likely to be insider trading than some secret special trading algorithm that no one else managed to come up with in 20 years.
dna_polymerase 3y ago
To my knowledge, RenTec aren't market makers, they supposedly run directional bets. It is highly unlikely to do that with their size of funds ($130B) for that long (>20 years) with that success rate (>60% p.a.)

n2d4 3y ago

If it's a secret sauce that is based on public information (aka not insider trading), then it's unlikely that no one else but this one company has discovered it. It's just extremely unlikely. Plus, plenty of "godlike investors" were clearly willing to do things that landed them in jail (SBF, Madoff, etc). Hiring as an edge makes a lot more sense. Quant trading is often not about a single strategy but about the sum of many small ones. And other quants that have been taking similar hiring approaches also had incredible success (eg. Jane Street, Citadel, Jump Trading, Optiver, etc). RenTec just has a reputation of being "the best", which in turn makes the best people more likely to join them, which again in turn makes RenTec better, like a vicious cycle. I also want to mention that in some years, there's a massive discrepancy between RenTec's internal Medallion fund (+76% in 2020), and its external funds (-19% to -31% in 2020). Not saying there is something to it (they never claimed using the same strategies), but it does seem at least a bit suspicious.

sdfghswe 3y ago
> Hiring as an edge makes a lot more sense. Quant trading is often not about a single strategy but about the sum of many small ones. And other quants that have been taking similar hiring approaches also had incredible success (eg. Jane Street, Citadel, Jump Trading, Optiver, etc). RenTec just has a reputation of being "the best", which in turn makes the best people more likely to join them, which again in turn makes RenTec better, like a vicious cycle. Weren't you meant to make the case for insider trading? This isn't insider trading. > I also want to mention that in some years, there's a massive discrepancy between RenTec's internal Medallion fund (+76% in 2020), and its external funds (-19% to -31% in 2020). Not saying there is something to it (they never claimed using the same strategies), but it does seem at least a bit suspicious. Are you telling me that the insiders keep the good stuff for themselves and the outsiders get fucked? I don't find that suspicious at all.
- n2d4 3y ago
  I'm supporting dna_polymerase's point, that RenTec's edge is much more likely to be hiring smart people than insider trading and more likely to be insider trading than some secret special trading algorithm that no one else managed to come up with in 20 years.

dna_polymerase 3y ago

To my knowledge, RenTec aren't market makers, they supposedly run directional bets. It is highly unlikely to do that with their size of funds ($130B) for that long (>20 years) with that success rate (>60% p.a.)