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It was closed to external investors in 1993, and had gains of 98% in 2008, in the middle of an economic meltdown. How come they figured it out for one single f

It was closed to external investors in 1993, and had gains of 98% in 2008, in the middle of an economic meltdown. How come they figured it out for one single fund, but aren't able to make any alternative strong strategies except the secret and closed one?

TheAlchemist 3y ago
Strategies have limits on how much money they can manage. By limits, I mean - either it's impossible to put in more (could be because there are no more counterparties to trade with above a certain amount) or it would significantly decrease performance.
- bluepizza 3y ago
  And in the 30 years since closure, which has seen China, USA, and Europe boom and multiply in size, somehow the strategy still has limits? My questions are valid, and there might be valid answers. We don't know, because nobody knows how Medallion works. All we know is that nobody else can replicate it, not even RenTech itself. Which makes asking questions very important.
  - bmitc 3y ago
    > All we know is that nobody else can replicate it, not even RenTech itself. Several firms have done similar things.
    - bluepizza 3y ago
      Do you have examples? Googling is not yielding any results for me.
  - TheAlchemist 3y ago
    Yes, it would still have limits. There are several trading / arbitrage companies that are bringing roughly the same money over the years - for the past 20 years (I used to work for one). That being said, RenTech is indeed very interesting. For all we know, it could be a money laundering operation or something similar to Madoff's structure. Or they are just very very good, or lucky. Time will tell !
bmitc 3y ago
> had gains of 98% in 2008, in the middle of an economic meltdown Medallion does not act on its own or any human sentiment. It is a black box trading strategy that looks for signals. It's not aurprise that during downturns, the overall market is incredibly inefficient. Medallion makes money off of the market's inefficiencies. I don't know what that has to donwith internal vs external investors though. > How come they figured it out for one single fund, but aren't able to make any alternative strong strategies except the secret and closed one? I dislike responding to a question with a question, but why would that work? Medallion has made several people billionaires and has done so incredibly quickly. Trying to replicate it with the same strategy will just step on its toes. It helps to understand Medallion. It is a massive statistical trading system that places a huge amount of bets across all markets, like all of them, and hopes to win say 51% of the bets. When it reaches a certain size, they cap it by taking off all money above the cap and returning it to investors. You can't add more money to Medallion and keep its performance up. It moves the market too much and degrades its positions.
- bluepizza 3y ago
  Nothing can help understand Medallion, because there is no actual information about it. Everything you just said is conjecture.
  - bmitc 3y ago
    I suggest the book The Man Who Beat the Market and watching or listening to interviews by those who worked there. There's enough information that gives a sense of what Medallion does and how it works.
    - bluepizza 3y ago
      I have read the book. It is unconfirmed hearsay at best.

TheAlchemist 3y ago

Strategies have limits on how much money they can manage. By limits, I mean - either it's impossible to put in more (could be because there are no more counterparties to trade with above a certain amount) or it would significantly decrease performance.

bluepizza 3y ago
And in the 30 years since closure, which has seen China, USA, and Europe boom and multiply in size, somehow the strategy still has limits? My questions are valid, and there might be valid answers. We don't know, because nobody knows how Medallion works. All we know is that nobody else can replicate it, not even RenTech itself. Which makes asking questions very important.
- bmitc 3y ago
  > All we know is that nobody else can replicate it, not even RenTech itself. Several firms have done similar things.
  - bluepizza 3y ago
    Do you have examples? Googling is not yielding any results for me.
- TheAlchemist 3y ago
  Yes, it would still have limits. There are several trading / arbitrage companies that are bringing roughly the same money over the years - for the past 20 years (I used to work for one). That being said, RenTech is indeed very interesting. For all we know, it could be a money laundering operation or something similar to Madoff's structure. Or they are just very very good, or lucky. Time will tell !

bmitc 3y ago

> had gains of 98% in 2008, in the middle of an economic meltdown Medallion does not act on its own or any human sentiment. It is a black box trading strategy that looks for signals. It's not aurprise that during downturns, the overall market is incredibly inefficient. Medallion makes money off of the market's inefficiencies. I don't know what that has to donwith internal vs external investors though. > How come they figured it out for one single fund, but aren't able to make any alternative strong strategies except the secret and closed one? I dislike responding to a question with a question, but why would that work? Medallion has made several people billionaires and has done so incredibly quickly. Trying to replicate it with the same strategy will just step on its toes. It helps to understand Medallion. It is a massive statistical trading system that places a huge amount of bets across all markets, like all of them, and hopes to win say 51% of the bets. When it reaches a certain size, they cap it by taking off all money above the cap and returning it to investors. You can't add more money to Medallion and keep its performance up. It moves the market too much and degrades its positions.

bluepizza 3y ago
Nothing can help understand Medallion, because there is no actual information about it. Everything you just said is conjecture.
- bmitc 3y ago
  I suggest the book The Man Who Beat the Market and watching or listening to interviews by those who worked there. There's enough information that gives a sense of what Medallion does and how it works.
  - bluepizza 3y ago
    I have read the book. It is unconfirmed hearsay at best.