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"And I thought hedge fund managers were not adding value to society"... Its always weird to me when people in the tech industry say that hedge fund managers/qu

"And I thought hedge fund managers were not adding value to society"... Its always weird to me when people in the tech industry say that hedge fund managers/quants "add no value to society". The presumption that any individual's job "adds value to society" is really arrogant...do you really think that all the software engineers working at Google or FB or Twitter to make people click advertisement "add value to society"? Does my local grocer "add value to society"? Its such a vacuous statement. I apologize in advance if this is harsh, so I would offer you to read more about finance before you make blanket statements like "hedge funds do not add value to society"

TheEzEzz 12y ago
Worse case scenario: making people click google ads is just as mindlessly financially driven as eking out more alpha from an algo, in which case the googlers still win, because at least some of that money generated goes toward moonshot projects that may very well benefit society.
- fintechthrowaw 12y ago
  I respect Google, Facebook, and Twitter because of their ability to connect people and their genuine intellectual contributions to fields like information retrieval and AI, and sure, their moonshots. But I think its arrogant to say whether someone adds value to society because its an extremely complicated philosophical question (judging the guy playing the game saying he's wasting his time). I'm not sure its fair to characterize all hedge funds as simply trying to squeeze out alpha though either, there are many prominent activist investors who've pushed for greater corporate governance and transparency, in cases like MBIA, Lehman, Herbalife most recently, etc. And if you wanted to consider Google's moonshots, it should be only fair to consider the billions most of the hedge fund managers have given away in a dick-measuring contest to various charities and research initiatives. But I understand your argument and agree that a lot of financialization provides no benefit to anyone.
chii 12y ago
i think when someone laments that a high-frequency-trader/hedge fund managers don't add value, they really mean that they get an unfair amount of money for little visible work, and little visible benefit to somebody else in the world. I emphasis visible. I do believe that having arbitrage evens out the pricing of long term assets, and having traders do this continuously does indeed make the prices of things reflect reality. That they make a lot of money doing this seems unfair, but the world isn't fair.

TheEzEzz 12y ago

Worse case scenario: making people click google ads is just as mindlessly financially driven as eking out more alpha from an algo, in which case the googlers still win, because at least some of that money generated goes toward moonshot projects that may very well benefit society.

fintechthrowaw 12y ago
I respect Google, Facebook, and Twitter because of their ability to connect people and their genuine intellectual contributions to fields like information retrieval and AI, and sure, their moonshots. But I think its arrogant to say whether someone adds value to society because its an extremely complicated philosophical question (judging the guy playing the game saying he's wasting his time). I'm not sure its fair to characterize all hedge funds as simply trying to squeeze out alpha though either, there are many prominent activist investors who've pushed for greater corporate governance and transparency, in cases like MBIA, Lehman, Herbalife most recently, etc. And if you wanted to consider Google's moonshots, it should be only fair to consider the billions most of the hedge fund managers have given away in a dick-measuring contest to various charities and research initiatives. But I understand your argument and agree that a lot of financialization provides no benefit to anyone.

chii 12y ago

i think when someone laments that a high-frequency-trader/hedge fund managers don't add value, they really mean that they get an unfair amount of money for little visible work, and little visible benefit to somebody else in the world. I emphasis visible. I do believe that having arbitrage evens out the pricing of long term assets, and having traders do this continuously does indeed make the prices of things reflect reality. That they make a lot of money doing this seems unfair, but the world isn't fair.