8 ms·

Unpopular opinion, but I suspect this is actually how a lot of hedge funds have historically outperformed the markets. The amount of nonpublic data needed to ge

by sfblah 2y ago

Unpopular opinion, but I suspect this is actually how a lot of hedge funds have historically outperformed the markets. The amount of nonpublic data needed to get an edge is surprisingly small.

genocidicbunny 2y ago
I recall learning this lesson pretty early on. In high school, the econ teacher ran a stock trading game - you get some starting capital, you make trades, at the end of the quarter whoever had the most got some kind of reward. At the time we had a family friend that was working for a company about to announce a stock split along with a very good earnings report. He told me when to go all in on that stock, and i did exactly that. The day after that split my portfolio had more than doubled, beating the class record by a significant margin. Said record stood until the teacher retired. Not sure if it was the lesson he meant to impart though since I think most took away from it that to win you need to lie, cheat and steal.
- OrigamiPastrami 2y ago
  > Not sure if it was the lesson he meant to impart though since I think most took away from it that to win you need to lie, cheat and steal. Better to teach reality than ideology, assuming you want to be a practitioner instead of a theorist.
  - Scene_Cast2 2y ago
    I like Margin Call's quote - "be first, be smarter, or cheat".
  - paulryanrogers 2y ago
    Nothing ever bad happened when societies trade high trust for low trust. No sir. All roses and sunshine. Certainly worthwhile for me to bend or break any rule keeping me from my best life.
    - OrigamiPastrami 2y ago
      Hating cheaters does nothing to change the reality of it being an effective method for getting ahead.
      - paulryanrogers 2y ago
        Only in narrow circumstances and only to a point. Or at least that's my (limited) understanding of game theory.
        OrigamiPastrami 2y ago
        You're a caricature of my original point and you don't even realize it.
        paulryanrogers 2y ago
        IME the reality is that trust erodes as cheating becomes widespread. The consequences of less trust are significantly higher costs and more stress and fear. FWIW, I don't advocate blind trust. Perhaps you meant to say we should teach the reality that cheating exists and is bad; not to pretend it doesn't exist? Or that it's hopeless to be honest and trustworthy because some others may not be? Which leads to ... apathy or more cheating and less trust.
        OrigamiPastrami 2y ago
        I never said cheating is moral. I said cheating is advantageous. You think cheaters care that they're hurting society? You can't be a cheater without being selfish.
      - keiferski 2y ago
        It would if said cheaters were socially ostracized. Instead we make big budget movies about them, they get famous, and then earn money from the newfound attention.
- mordymoop 2y ago
  I won a similar contest by being the only student who never bothered to log into my trading account, thus keeping all my assets in cash by default. The market had a down week, so everybody except me was in the red. I think the lesson, which has served me well, is to not make short-term trades.
  - im3w1l 2y ago
    The lesson is that in a win/not win contest, you want to do something no one else is doing. Maybe things go your way or maybe they don't. But you avoid the risk of being narrowly beat.
  - m3kw9 2y ago
    short term trade is gambling unless you really have data and speed that you know how to use. Most trader uses charts and whats hot, the profits then runs on the greater fool theory.
    - datavirtue 2y ago
      You can go long and sell if there is a significant breakout. Then you hunt down the next value stock. A return is a return. If you got into Nvidia ten years ago you would have to be dumb not to pull it now. There is market timing foolery, and then there is just being realistic.
  - cael450 2y ago
    When I studied abroad, I lost my debit card and had to get it mailed to me internationally. I was down to nothing and spent a week living off of rice and furikake. What saved me is one of these trading contests for my school's business club. I signed up for it and dumped all of my "money" into playboy and forgot about it. Turns out they won some big lawsuit and the stock spiked just in time. First place was a $200 dollar fine. I had to have the club president spot me the train ticket to go pick it up.
    - CalRobert 2y ago
      Just to be clear... It was a prize, not a fine right?
- koolba 2y ago
  > At the time we had a family friend that was working for a company about to announce a stock split along with a very good earnings report. He told me when to go all in on that stock, and i did exactly that. The day after that split my portfolio had more than doubled, beating the class record by a significant margin. Said record stood until the teacher retired. That family friend seems like a complete idiot for passing on that information. Plus a stock split on its own has no change to the value of a stock. There’s no reason for it to double overnight. In fact the direct effect on the price is the opposite as you have twice (or K times) as many shares and each is worth half (or 1/K). So the net effect is zero.
  - MassPikeMike 2y ago
    In theory you are right that stock splits have no bearing on returns, but in practice it is well documented (see e.g. [1]) that "stock splits and reverse splits often result in short-term abnormal returns even though such split events do not change any fundamental factors affecting the valuation of a firm's stock." [1] https://www.sciencedirect.com/science/article/pii/S0167268123002858 https://www.sciencedirect.com/science/article/pii/S016726812...
    - senkora 2y ago
      > We provide evidence that the incomplete adjustment of share prices to splits or reverse splits can be attributed to heterogeneity in traders' cognitive abilities. What a colorful turn of phrase.
  - genocidicbunny 2y ago
    The split was followed by the stock very quickly regaining it's previous per share value over the course of the trading day, though maybe it was over the next week; this was a few decades ago. And i agree that he shouldn't have told me. A few years later i actually told him something along those lines. I appreciated it but he exposed himself to a lot of legal risk.
- randerson 2y ago
  I knew someone who won a similar stock trading contest held by a radio station about 30 years ago. He put all his pretend money into a low volume penny stock. Then in real life he bought enough of that same penny stock to raise the stock price substantially. He'd somehow calculated that the cash prize would exceed the cost of manipulating the stock. IIRC the stock price got another boost when they announced his winning trade on the radio, enabling him to make a tidy profit.
  - rjrdi38dbbdb 2y ago
    That's exactly how clients beat bucket shops as well. If they don't set their risk limits low enough and fees high enough, you can profit by manipulating the underlying markets.
- insidstwr 2y ago
  Is what he did there illegal?
avidiax 2y ago
My mostly uninformed hunch is that much of the fancy "public information" analysis that hedge funds claim to do to have their edge is actually parallel construction for insider tips. I've heard it claimed that some funds have flown helicopters over oil storage fields to measure the shadows in the tanks to know how much oil is stored, or bought satellite photos to analyze the parking lot use of major retailers during the Christmas season. These things sound way too specific to just perform on a hunch, and even then, you might get the analysis wrong if you don't have the insider tip to check your math. But it's probably enough to keep the SEC investigator from having a case unless they find the insider link directly.
- throwup238 2y ago
  > I've heard it claimed that some funds have flown helicopters over oil storage fields to measure the shadows in the tanks to know how much oil is stored, or bought satellite photos to analyze the parking lot use of major retailers during the Christmas season. This is really common and basically table stakes for sophisticated firms now (those that invest in relevant sectors). They track everything from parking lots to freighters and oil tankers to crop yields via satellite imagery and flyovers. It's gotten cheaper with drones so more important areas like major ports might get daily fly bys to track containers and boat traffic. Some have static cameras pointed at these things
  - Loughla 2y ago
    The only thing I can speak to is crop yields. Satellite imagery S flyovers won't really teach you a lot outside of a binary yes/no r field is alive. The technology farmers use teams yields to the square foot. I'm betting you can buy that from John Deere and others. That's probably where they get that?
    - throwup238 2y ago
      I don't know how effective the project was because I left before it finished but we were working on using the normalized difference vegetation index, normalized difference water index, and a bunch of other data points to try to predict crop yields. Farmers might get that kind of stuff from flyovers for the extra resolution but that was cost prohibitive for our purposes except when validating data from the satellites.
interroboink 2y ago
There is the fun example of a trade that was made before that information should have been physically able to arrive, based on speed-of-light limits. [1] (2013) The article says "Presumably there will be a hard look into what exactly happened..." but I wonder how hard that look was, and how often that stuff still happens. [1] https://www.washingtonpost.com/news/wonk/wp/2013/09/24/traders-may-have-gotten-last-weeks-fed-news-7-milliseconds-early/ https://www.washingtonpost.com/news/wonk/wp/2013/09/24/trade...
- ttyprintk 2y ago
  The regulators looking at gold futures would have been contending with manipulators placing massive orders in bad faith, trying to trigger stop loss. That all led up to the flash crash.
halfcat 2y ago
I would take the idea further, that profitable retail traders are profitable, in large part, because corruption exists. Not that they are engaged in corruption, but that any patterns they find primarily exist only as a result of the corruption of others. It’s a working hypothesis at least.
- datavirtue 2y ago
  I think it's the market makers and algorithmic traders. Not sure if they are corrupt. When things get famous the retail traders come in and the algos drop off and then the market makers start futzing over the arbitrage.
m3kw9 2y ago
in the form of nudge nudge wink wink
blackeyeblitzar 2y ago
My guess is they also make use of “expert networks” to access confidential information.
- datavirtue 2y ago
  Anyone can pay for that. The problem is being able to read and digest it all.
lumost 2y ago
Also pretty easy to hide in the noise of a trading algorithm. Eg. Make bets that hold a collection of biotech firms on the day that the fda approves their treatment. You could also up the exposure by choosing to hold N small market segments, that all overlap with the stock that’s being insider traded.
ants_everywhere 2y ago
One thing I rarely hear people talk about is how many libertarians believe insider trading shouldn't be a crime. There are lots of libertarians in the financial industry, so there are likely lots of people in the financial industry who believe that laws against insider trading are evil. So when I picture insider traders, I don't picture shady organized criminals doing things they know are bad. I picture cowbows believing themselves to be the good guys for freedomizing the market. And when you think about all the people who believe that insider trading is a positive good, you kind of have to conclude that it's rampant. It's financially lucrative, hard to detect, harder to prove, relatively easy to hide, relatively easy to pin on someone below you in the org, and people think they're good for doing it. What force is keeping it in check?
- TacticalCoder 2y ago
  [flagged]
  - ants_everywhere 2y ago
    I'm sorry I hurt your feelings. > there are hardly any libertarians There are tons of libertarians in the US. If you're in Luxembourg (judging from your profile?) you may have fewer of them. There was a big push in the 70s. Most of the ones I've known well grew up in the 70s and read more or less the same literature. The had some influence in econ in the 70s and 80s and their influence is less mainstream now, so you may have fewer younger ones. There are still lots of them in tech, especially in the bay area. Perhaps they still skew older, I don't know much about the demographics these days. It's partially an American phenomenon because of the cold war and because it became a way for conservatives to --racism and ++drugs. Nowadays you don't need a third party for that. > May I have some of what you're smoking? - https://www.cato.org/commentary/its-time-legalize-insider-trading https://www.cato.org/commentary/its-time-legalize-insider-tr... - https://mises.org/articles-interest/what-morally-right-insider-trading https://mises.org/articles-interest/what-morally-right-insid... - https://www.investopedia.com/articles/markets-economy/092216/why-insider-trading-bad-financial-markets.asp https://www.investopedia.com/articles/markets-economy/092216... - https://www.reddit.com/r/changemyview/comments/2v3ikz/cmv_insider_trading_should_be_legal/ https://www.reddit.com/r/changemyview/comments/2v3ikz/cmv_in... - https://politics.stackexchange.com/a/20426 https://politics.stackexchange.com/a/20426 - https://www.pbs.org/wgbh/frontline/article/should-insider-trading-be-legal/ https://www.pbs.org/wgbh/frontline/article/should-insider-tr... Plus many more. Google around for "insider trading" plus some of the standard libertarian economics keywords like "coasian" or "austrian" and you can find some of the literature. I haven't tried smoking any of it, though, and can't advise it.
maga_2020 2y ago
Not just hedge funds. Congressional democrats, and i am sure republicans too can outperform S&P 500 -- >" An exchange-traded fund (ETF) that tracks the stock trades of Democratic members of Congress has been outperforming the S&P 500 since its launch in 2023. " https://markets.businessinsider.com/news/etf/etf-named-after-nancy-pelosi-tracking-congressional-democrats-stock-trades-surpasses-s-p-500-with-tech-triumph-1033116562 https://markets.businessinsider.com/news/etf/etf-named-after...
- chewz 2y ago
  Hillary Clinton cattle futures controversy - Wikipedia https://en.wikipedia.org/wiki/Hillary_Clinton_cattle_futures_controversy https://en.wikipedia.org/wiki/Hillary_Clinton_cattle_futures... ETF Named After Nancy Pelosi, Tracking Congressional Democrats' Stock Trades, Surpasses S&P 500 with Tech Triumph | Markets Insider https://markets.businessinsider.com/news/etf/etf-named-after-nancy-pelosi-tracking-congressional-democrats-stock-trades-surpasses-s-p-500-with-tech-triumph-1033116562?op=1 https://markets.businessinsider.com/news/etf/etf-named-after...
  - bobmcnamara 2y ago
    Sssh, we don't speak of the chicken man's chicken monies.
branko_d 2y ago
> hedge funds have historically outperformed the markets According to Investopedia: "From January 1994 to June 2023—through both bull and bear markets—the passive S&P 500 Index outperformed every major hedge fund strategy by over 2.8 percentage points in annualized return." https://www.investopedia.com/articles/03/121003.asp https://www.investopedia.com/articles/03/121003.asp
- ttyprintk 2y ago
  Good article. The grandparent comment is about hedge funds that outperform. Rather than offering the automatic diversification most people seek from hedge funds, his/her point is that some which are highly correlated to the market are laundering insider info.
rqtwteye 2y ago
That’s what some guys I knew in New York told me. People talk to each other and the hedge fund guys don’t really compete with each other.
jjallen 2y ago
Like which ones do you suspect have done this? Many funds do not use these sorts of strategies and the ones that do almost always underperform after fees. So in aggregate there isn’t much evidence of outperformance.
deleted 2y ago
[deleted]

by sfblah 2y ago

Unpopular opinion, but I suspect this is actually how a lot of hedge funds have historically outperformed the markets. The amount of nonpublic data needed to get an edge is surprisingly small.

genocidicbunny 2y ago

I recall learning this lesson pretty early on. In high school, the econ teacher ran a stock trading game - you get some starting capital, you make trades, at the end of the quarter whoever had the most got some kind of reward. At the time we had a family friend that was working for a company about to announce a stock split along with a very good earnings report. He told me when to go all in on that stock, and i did exactly that. The day after that split my portfolio had more than doubled, beating the class record by a significant margin. Said record stood until the teacher retired. Not sure if it was the lesson he meant to impart though since I think most took away from it that to win you need to lie, cheat and steal.

OrigamiPastrami 2y ago
> Not sure if it was the lesson he meant to impart though since I think most took away from it that to win you need to lie, cheat and steal. Better to teach reality than ideology, assuming you want to be a practitioner instead of a theorist.
- Scene_Cast2 2y ago
  I like Margin Call's quote - "be first, be smarter, or cheat".
- paulryanrogers 2y ago
  Nothing ever bad happened when societies trade high trust for low trust. No sir. All roses and sunshine. Certainly worthwhile for me to bend or break any rule keeping me from my best life.
  - OrigamiPastrami 2y ago
    Hating cheaters does nothing to change the reality of it being an effective method for getting ahead.
    - paulryanrogers 2y ago
      Only in narrow circumstances and only to a point. Or at least that's my (limited) understanding of game theory.
      - OrigamiPastrami 2y ago
        You're a caricature of my original point and you don't even realize it.
        paulryanrogers 2y ago
        IME the reality is that trust erodes as cheating becomes widespread. The consequences of less trust are significantly higher costs and more stress and fear. FWIW, I don't advocate blind trust. Perhaps you meant to say we should teach the reality that cheating exists and is bad; not to pretend it doesn't exist? Or that it's hopeless to be honest and trustworthy because some others may not be? Which leads to ... apathy or more cheating and less trust.
        OrigamiPastrami 2y ago
        I never said cheating is moral. I said cheating is advantageous. You think cheaters care that they're hurting society? You can't be a cheater without being selfish.
    - keiferski 2y ago
      It would if said cheaters were socially ostracized. Instead we make big budget movies about them, they get famous, and then earn money from the newfound attention.
mordymoop 2y ago
I won a similar contest by being the only student who never bothered to log into my trading account, thus keeping all my assets in cash by default. The market had a down week, so everybody except me was in the red. I think the lesson, which has served me well, is to not make short-term trades.
- im3w1l 2y ago
  The lesson is that in a win/not win contest, you want to do something no one else is doing. Maybe things go your way or maybe they don't. But you avoid the risk of being narrowly beat.
- m3kw9 2y ago
  short term trade is gambling unless you really have data and speed that you know how to use. Most trader uses charts and whats hot, the profits then runs on the greater fool theory.
  - datavirtue 2y ago
    You can go long and sell if there is a significant breakout. Then you hunt down the next value stock. A return is a return. If you got into Nvidia ten years ago you would have to be dumb not to pull it now. There is market timing foolery, and then there is just being realistic.
- cael450 2y ago
  When I studied abroad, I lost my debit card and had to get it mailed to me internationally. I was down to nothing and spent a week living off of rice and furikake. What saved me is one of these trading contests for my school's business club. I signed up for it and dumped all of my "money" into playboy and forgot about it. Turns out they won some big lawsuit and the stock spiked just in time. First place was a $200 dollar fine. I had to have the club president spot me the train ticket to go pick it up.
  - CalRobert 2y ago
    Just to be clear... It was a prize, not a fine right?
koolba 2y ago
> At the time we had a family friend that was working for a company about to announce a stock split along with a very good earnings report. He told me when to go all in on that stock, and i did exactly that. The day after that split my portfolio had more than doubled, beating the class record by a significant margin. Said record stood until the teacher retired. That family friend seems like a complete idiot for passing on that information. Plus a stock split on its own has no change to the value of a stock. There’s no reason for it to double overnight. In fact the direct effect on the price is the opposite as you have twice (or K times) as many shares and each is worth half (or 1/K). So the net effect is zero.
- MassPikeMike 2y ago
  In theory you are right that stock splits have no bearing on returns, but in practice it is well documented (see e.g. [1]) that "stock splits and reverse splits often result in short-term abnormal returns even though such split events do not change any fundamental factors affecting the valuation of a firm's stock." [1] https://www.sciencedirect.com/science/article/pii/S0167268123002858 https://www.sciencedirect.com/science/article/pii/S016726812...
  - senkora 2y ago
    > We provide evidence that the incomplete adjustment of share prices to splits or reverse splits can be attributed to heterogeneity in traders' cognitive abilities. What a colorful turn of phrase.
- genocidicbunny 2y ago
  The split was followed by the stock very quickly regaining it's previous per share value over the course of the trading day, though maybe it was over the next week; this was a few decades ago. And i agree that he shouldn't have told me. A few years later i actually told him something along those lines. I appreciated it but he exposed himself to a lot of legal risk.
randerson 2y ago
I knew someone who won a similar stock trading contest held by a radio station about 30 years ago. He put all his pretend money into a low volume penny stock. Then in real life he bought enough of that same penny stock to raise the stock price substantially. He'd somehow calculated that the cash prize would exceed the cost of manipulating the stock. IIRC the stock price got another boost when they announced his winning trade on the radio, enabling him to make a tidy profit.
- rjrdi38dbbdb 2y ago
  That's exactly how clients beat bucket shops as well. If they don't set their risk limits low enough and fees high enough, you can profit by manipulating the underlying markets.
insidstwr 2y ago
Is what he did there illegal?

avidiax 2y ago

My mostly uninformed hunch is that much of the fancy "public information" analysis that hedge funds claim to do to have their edge is actually parallel construction for insider tips. I've heard it claimed that some funds have flown helicopters over oil storage fields to measure the shadows in the tanks to know how much oil is stored, or bought satellite photos to analyze the parking lot use of major retailers during the Christmas season. These things sound way too specific to just perform on a hunch, and even then, you might get the analysis wrong if you don't have the insider tip to check your math. But it's probably enough to keep the SEC investigator from having a case unless they find the insider link directly.

throwup238 2y ago
> I've heard it claimed that some funds have flown helicopters over oil storage fields to measure the shadows in the tanks to know how much oil is stored, or bought satellite photos to analyze the parking lot use of major retailers during the Christmas season. This is really common and basically table stakes for sophisticated firms now (those that invest in relevant sectors). They track everything from parking lots to freighters and oil tankers to crop yields via satellite imagery and flyovers. It's gotten cheaper with drones so more important areas like major ports might get daily fly bys to track containers and boat traffic. Some have static cameras pointed at these things
- Loughla 2y ago
  The only thing I can speak to is crop yields. Satellite imagery S flyovers won't really teach you a lot outside of a binary yes/no r field is alive. The technology farmers use teams yields to the square foot. I'm betting you can buy that from John Deere and others. That's probably where they get that?
  - throwup238 2y ago
    I don't know how effective the project was because I left before it finished but we were working on using the normalized difference vegetation index, normalized difference water index, and a bunch of other data points to try to predict crop yields. Farmers might get that kind of stuff from flyovers for the extra resolution but that was cost prohibitive for our purposes except when validating data from the satellites.

interroboink 2y ago

There is the fun example of a trade that was made before that information should have been physically able to arrive, based on speed-of-light limits. [1] (2013) The article says "Presumably there will be a hard look into what exactly happened..." but I wonder how hard that look was, and how often that stuff still happens. [1] https://www.washingtonpost.com/news/wonk/wp/2013/09/24/traders-may-have-gotten-last-weeks-fed-news-7-milliseconds-early/ https://www.washingtonpost.com/news/wonk/wp/2013/09/24/trade...

ttyprintk 2y ago
The regulators looking at gold futures would have been contending with manipulators placing massive orders in bad faith, trying to trigger stop loss. That all led up to the flash crash.

halfcat 2y ago

I would take the idea further, that profitable retail traders are profitable, in large part, because corruption exists. Not that they are engaged in corruption, but that any patterns they find primarily exist only as a result of the corruption of others. It’s a working hypothesis at least.

datavirtue 2y ago
I think it's the market makers and algorithmic traders. Not sure if they are corrupt. When things get famous the retail traders come in and the algos drop off and then the market makers start futzing over the arbitrage.

m3kw9 2y ago

in the form of nudge nudge wink wink

blackeyeblitzar 2y ago

My guess is they also make use of “expert networks” to access confidential information.

datavirtue 2y ago
Anyone can pay for that. The problem is being able to read and digest it all.

lumost 2y ago

Also pretty easy to hide in the noise of a trading algorithm. Eg. Make bets that hold a collection of biotech firms on the day that the fda approves their treatment. You could also up the exposure by choosing to hold N small market segments, that all overlap with the stock that’s being insider traded.

ants_everywhere 2y ago

One thing I rarely hear people talk about is how many libertarians believe insider trading shouldn't be a crime. There are lots of libertarians in the financial industry, so there are likely lots of people in the financial industry who believe that laws against insider trading are evil. So when I picture insider traders, I don't picture shady organized criminals doing things they know are bad. I picture cowbows believing themselves to be the good guys for freedomizing the market. And when you think about all the people who believe that insider trading is a positive good, you kind of have to conclude that it's rampant. It's financially lucrative, hard to detect, harder to prove, relatively easy to hide, relatively easy to pin on someone below you in the org, and people think they're good for doing it. What force is keeping it in check?

TacticalCoder 2y ago
[flagged]
- ants_everywhere 2y ago
  I'm sorry I hurt your feelings. > there are hardly any libertarians There are tons of libertarians in the US. If you're in Luxembourg (judging from your profile?) you may have fewer of them. There was a big push in the 70s. Most of the ones I've known well grew up in the 70s and read more or less the same literature. The had some influence in econ in the 70s and 80s and their influence is less mainstream now, so you may have fewer younger ones. There are still lots of them in tech, especially in the bay area. Perhaps they still skew older, I don't know much about the demographics these days. It's partially an American phenomenon because of the cold war and because it became a way for conservatives to --racism and ++drugs. Nowadays you don't need a third party for that. > May I have some of what you're smoking? - https://www.cato.org/commentary/its-time-legalize-insider-trading https://www.cato.org/commentary/its-time-legalize-insider-tr... - https://mises.org/articles-interest/what-morally-right-insider-trading https://mises.org/articles-interest/what-morally-right-insid... - https://www.investopedia.com/articles/markets-economy/092216/why-insider-trading-bad-financial-markets.asp https://www.investopedia.com/articles/markets-economy/092216... - https://www.reddit.com/r/changemyview/comments/2v3ikz/cmv_insider_trading_should_be_legal/ https://www.reddit.com/r/changemyview/comments/2v3ikz/cmv_in... - https://politics.stackexchange.com/a/20426 https://politics.stackexchange.com/a/20426 - https://www.pbs.org/wgbh/frontline/article/should-insider-trading-be-legal/ https://www.pbs.org/wgbh/frontline/article/should-insider-tr... Plus many more. Google around for "insider trading" plus some of the standard libertarian economics keywords like "coasian" or "austrian" and you can find some of the literature. I haven't tried smoking any of it, though, and can't advise it.

maga_2020 2y ago

Not just hedge funds. Congressional democrats, and i am sure republicans too can outperform S&P 500 -- >" An exchange-traded fund (ETF) that tracks the stock trades of Democratic members of Congress has been outperforming the S&P 500 since its launch in 2023. " https://markets.businessinsider.com/news/etf/etf-named-after-nancy-pelosi-tracking-congressional-democrats-stock-trades-surpasses-s-p-500-with-tech-triumph-1033116562 https://markets.businessinsider.com/news/etf/etf-named-after...

chewz 2y ago
Hillary Clinton cattle futures controversy - Wikipedia https://en.wikipedia.org/wiki/Hillary_Clinton_cattle_futures_controversy https://en.wikipedia.org/wiki/Hillary_Clinton_cattle_futures... ETF Named After Nancy Pelosi, Tracking Congressional Democrats' Stock Trades, Surpasses S&P 500 with Tech Triumph | Markets Insider https://markets.businessinsider.com/news/etf/etf-named-after-nancy-pelosi-tracking-congressional-democrats-stock-trades-surpasses-s-p-500-with-tech-triumph-1033116562?op=1 https://markets.businessinsider.com/news/etf/etf-named-after...
- bobmcnamara 2y ago
  Sssh, we don't speak of the chicken man's chicken monies.

branko_d 2y ago

> hedge funds have historically outperformed the markets According to Investopedia: "From January 1994 to June 2023—through both bull and bear markets—the passive S&P 500 Index outperformed every major hedge fund strategy by over 2.8 percentage points in annualized return." https://www.investopedia.com/articles/03/121003.asp https://www.investopedia.com/articles/03/121003.asp

ttyprintk 2y ago
Good article. The grandparent comment is about hedge funds that outperform. Rather than offering the automatic diversification most people seek from hedge funds, his/her point is that some which are highly correlated to the market are laundering insider info.

rqtwteye 2y ago

That’s what some guys I knew in New York told me. People talk to each other and the hedge fund guys don’t really compete with each other.

jjallen 2y ago

Like which ones do you suspect have done this? Many funds do not use these sorts of strategies and the ones that do almost always underperform after fees. So in aggregate there isn’t much evidence of outperformance.

deleted 2y ago

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