There are some predatory quant strategies, and there are non-predatory quant strategies that do add value, both of which could be described as "I predict with h

There are some predatory quant strategies, and there are non-predatory quant strategies that do add value, both of which could be described as "I predict with high probability [know] that somebody else will buy X, so let's buy X first and sell it to them at a higher price." In fact, your description also describes a huge variety of economic activities from long-term fundamentals investing to using crude oil futures contracts to hedge an airline's jet fuel price exposure. (Note that since airlines don't refine their own jet fuel, they don't intend to take delivery of the crude, and their hedging activity depends on later selling to crude oil consumers.) If it takes 30 pages of stochastic calculus to explain the utility provided by a fund, the public is going to dismiss the fund as "providing no value" and the fund isn't going to bother even trying to defend itself, because it just sounds like excuses, even if there is very real value being provided. Many times the fallacy is in assuming that all market participants care only about average returns, when risk/volatility play a big role in the utility functions of the vast majority of market participants. For a very simplified example, let's say QFundA has discovered some very reliable heuristic for the movements of a variety of small cap retail equities over the one-week timeframe. Let's also say that Pensions R Us has decided to sell 50% of the average daily volume of a regional sporting goods retailer over the next 2 days. If QFundA's model strongly suggests that the price is going up over the week, QFundA may slowly take on those shares over 2 days (and hedge against big news using out of the money puts), followed by slowly selling them off over the following 2 trading days to market participants who weren't interested a few days earlier. QFundA has made money by smoothing out prices (and likely reducing the bid-ask spread). Pensions R Us gets a better average price than they would have otherwise, as QFundA's buying activity has offset the market impact of Pensions R Us's selling activity. Impatient/risk adverse market participants may have lower average returns because of QFundA's activities, but perhaps they're more than happy to pay a few basis points in order to get into or out of their positions faster. It's entirely possible that QFundA only slightly reduces average returns of other market participants while greatly reducing volatility, and thus bringing up everyone else's Sharpe ratios. In other words, when you take into account the fact that volatility/risk pays a big role in the utility functions of most market participants, it's possible that everyone wins, despite QFundA providing "zero value added" from the narrow viewpoint that only looks at the long-term price prediction provided by long-term "fundamentals" investors. QFundA's strategy could still be summarized as "I know [predict high probability that] somebody else will buy X, so let's buy X first and sell it to them at a higher price", and yet QFundA provides real value to the market as a whole. There are some predatory strategies that don't provide any value to other market participants. However, just because you don't understand the value provided by some market participant (and they know that trying to explain it is just going to sound like nonsense excuses to someone with your level of understanding) doesn't mean that no value is added.