5 ms·

>People didn't stop working on this in 1989 - they realised they can make lots of money doing it and do it privately. Mind elaborating?

SavageBeast 2y ago
Speaking for myself and likely others with similar motivations, yes we can "figure it out" and publish something to show our work and expand the field of endeavor with our findings - OR - we can figure something profitable out on our own and use our own funds to trade our strategies with our own accounts. Anyone who has figured out something relatively profitable isn't telling anyone how they did it.
- andsoitis 2y ago
  > Anyone who has figured out something relatively profitable isn't telling anyone how they did it. Corollary: someone who is selling you tools or strategies on how to make tons and tons of money, is probably not making tons and tons of money employing said tools and strategies, but instead making their money by having you buy their advice.
  - SavageBeast 2y ago
    Absolutely correct - and more over - when you do sit someone down (in my case, someone with a "superior education" in finance compared to my CS degree) and explain things to them, they simply don't understand it at all and assume you're crazy because you're not doing what they were taught in Biz School.
  - BobaFloutist 2y ago
    I think I could probably make more money selling a tool or strategy that consistently, reliably makes ~2% more than government bonds than I could make off it myself, with my current capital.
    - bongodongobob 2y ago
      Lol try it and get back to us.
      - BobaFloutist 2y ago
        Well, see, I don't actually have a method for that. But if I did, I think my capital is low enough that I'd have more success selling it to other people than trying to exploit it myself, since the benefit would be pretty minimal if I did it with just my own savings, but could be pretty dramatic for, say, banks.
        mcoliver 2y ago
        Strats tend to have limits. What works for you may fall apart with large amounts of capital. Don't discount compound interest. $10,000 compounding 30% over 20 years is 2 million without any additional capital.
    - SavageBeast 2y ago
      Seems like the money here would be building a shiny, public facing version of the tool behind a robust paywall and build a relationship with a few Broker Dealer firms who can make this product available to the Financial Advisors in their network. If you were running this yourself with $1M input capital, that'd be $20k/year per 1M of input - so $20K is a nice number to try and beat selling a product that promulgates a strategy. But you're going to run into the question from people using the product: "Yeah - but HOW DOES IT WORK??!!!" and once you tell them does your ability to get paid disappear? Do they simply re-package your strategy as their own and cease to pay you (and worse start charging for your work)? Is your strategy so complicated that the value of the tool itself doing the heavy lifting makes it sticky? Getting people to put their money into some Black Box kind of strategy would probably be challenging - but Ive never tried it - it may be easier than giving away free beer for all I know. Sounds like a fun MVP effort really. Give it a try - who knows what might happen.
      - madmask 2y ago
- jasonfarnon 2y ago
  Why not then publish the strategies once outmoded, or are they in fact published? Can I go see somewhere what strategies big funds used in the 90s to make bank, which presumably no longer offer a competitive advantage? The way I can go see what computer exploits/hacks used to work when they were still secret? Maybe it's just what I know, but I can't help but think the "strategies" are a lot like security exploits--some cleverness, some technical facility, but mainly the result of staring at the system for a really long time and stumbling on things.
  - ds_opseeker 2y ago
    > Why not then publish the strategies once outmoded Because then your competition knows which strategies don't work, and also what types of strategies you work on. Don't leak information.
  - at_a_remove 2y ago
    Why not? Because you won't know what of your strategies is outmoded by something new because that group is not publishing their strategy, which is like yours but on steroids, either. And then everything regresses to the Dark Forest game theory.
- Krasnol 2y ago
  Wouldn't publishing also influence the performance itself because it would also make an impact on the data? And if you'd calculate that in and the method is spreading, wouldn't that in turn have to be calculated in also, which would lead to a spiral?
dpflan 2y ago
Seems simple: Why share your effective strategies in an industry full of competition and those striving to gain a competitive edge?
melenaboija 2y ago
> Mind elaborating? I am assuming, he/she minds a lot.
Fomite 2y ago
At a SciPy meeting where someone in finance was presenting an intro on some tools, someone asked if they ever contribute code to those open source projects. Their answer was "Yes, but only after we've stopped making money with them."

SavageBeast 2y ago

Speaking for myself and likely others with similar motivations, yes we can "figure it out" and publish something to show our work and expand the field of endeavor with our findings - OR - we can figure something profitable out on our own and use our own funds to trade our strategies with our own accounts. Anyone who has figured out something relatively profitable isn't telling anyone how they did it.

andsoitis 2y ago
> Anyone who has figured out something relatively profitable isn't telling anyone how they did it. Corollary: someone who is selling you tools or strategies on how to make tons and tons of money, is probably not making tons and tons of money employing said tools and strategies, but instead making their money by having you buy their advice.
- SavageBeast 2y ago
  Absolutely correct - and more over - when you do sit someone down (in my case, someone with a "superior education" in finance compared to my CS degree) and explain things to them, they simply don't understand it at all and assume you're crazy because you're not doing what they were taught in Biz School.
- BobaFloutist 2y ago
  I think I could probably make more money selling a tool or strategy that consistently, reliably makes ~2% more than government bonds than I could make off it myself, with my current capital.
  - bongodongobob 2y ago
    Lol try it and get back to us.
    - BobaFloutist 2y ago
      Well, see, I don't actually have a method for that. But if I did, I think my capital is low enough that I'd have more success selling it to other people than trying to exploit it myself, since the benefit would be pretty minimal if I did it with just my own savings, but could be pretty dramatic for, say, banks.
      - mcoliver 2y ago
        Strats tend to have limits. What works for you may fall apart with large amounts of capital. Don't discount compound interest. $10,000 compounding 30% over 20 years is 2 million without any additional capital.
  - SavageBeast 2y ago
    Seems like the money here would be building a shiny, public facing version of the tool behind a robust paywall and build a relationship with a few Broker Dealer firms who can make this product available to the Financial Advisors in their network. If you were running this yourself with $1M input capital, that'd be $20k/year per 1M of input - so $20K is a nice number to try and beat selling a product that promulgates a strategy. But you're going to run into the question from people using the product: "Yeah - but HOW DOES IT WORK??!!!" and once you tell them does your ability to get paid disappear? Do they simply re-package your strategy as their own and cease to pay you (and worse start charging for your work)? Is your strategy so complicated that the value of the tool itself doing the heavy lifting makes it sticky? Getting people to put their money into some Black Box kind of strategy would probably be challenging - but Ive never tried it - it may be easier than giving away free beer for all I know. Sounds like a fun MVP effort really. Give it a try - who knows what might happen.
    - madmask 2y ago
jasonfarnon 2y ago
Why not then publish the strategies once outmoded, or are they in fact published? Can I go see somewhere what strategies big funds used in the 90s to make bank, which presumably no longer offer a competitive advantage? The way I can go see what computer exploits/hacks used to work when they were still secret? Maybe it's just what I know, but I can't help but think the "strategies" are a lot like security exploits--some cleverness, some technical facility, but mainly the result of staring at the system for a really long time and stumbling on things.
- ds_opseeker 2y ago
  > Why not then publish the strategies once outmoded Because then your competition knows which strategies don't work, and also what types of strategies you work on. Don't leak information.
- at_a_remove 2y ago
  Why not? Because you won't know what of your strategies is outmoded by something new because that group is not publishing their strategy, which is like yours but on steroids, either. And then everything regresses to the Dark Forest game theory.
Krasnol 2y ago
Wouldn't publishing also influence the performance itself because it would also make an impact on the data? And if you'd calculate that in and the method is spreading, wouldn't that in turn have to be calculated in also, which would lead to a spiral?

dpflan 2y ago

Seems simple: Why share your effective strategies in an industry full of competition and those striving to gain a competitive edge?

melenaboija 2y ago

> Mind elaborating? I am assuming, he/she minds a lot.

Fomite 2y ago

At a SciPy meeting where someone in finance was presenting an intro on some tools, someone asked if they ever contribute code to those open source projects. Their answer was "Yes, but only after we've stopped making money with them."