Hedge Funds

Discussion in 'Wall St. News' started by dealmaker, Feb 21, 2017.

  1. It is all about the outliers.
     
    #31     Feb 23, 2017
  2. dealmaker

    dealmaker

    #32     Feb 23, 2017
  3. Who would entrust their money to a part-timer?
     
    #33     Feb 23, 2017
  4. It all depends on strategy-- and the rest of the ecosystem- most strats are automated today. Remember, we are not talking mom & pop when it comes to hedge fund investors. Some of these cats are in 100 plus funds.

    But yeah, trust is tougher with a part timer growing assets.

    surf
     
    #34     Feb 23, 2017
  5. #35     Feb 23, 2017
  6. newwurldmn

    newwurldmn

    There was a Citigroup research paper a few years ago than an institutional fund can't survive on less than 300mm aum.

    I think most funds fail because they can never raise enough capital to set up the infrastructure required to manage institutional money.
     
    #36     Feb 23, 2017
    sle likes this.
  7. There's plenty of money to be made from non-institutional sources.
     
    #37     Feb 23, 2017
  8. sle

    sle

    Not sure that's true. Traders should focus on markets with largest inefficiencies. Risk premium can be fairly priced, in which case you are not producing any alpha. IMHO
     
    #38     Feb 23, 2017
    Sig and dealmaker like this.
  9. Maverick74

    Maverick74

    They can be and usually are one and the same. Risk premia generates inefficiencies. For example, the put skew in the S&P 500 is a function of risk premia AND a market inefficiency. The puts are over valued by any statistical measure and the premia exists to attract liquidity and entice others to provide insurance to those looking to lay off risk at a price.

    An even better example are options in the electricity market. The upside call skews in PJM are VERY pronounced. Very few people want to sell them because of the risk but the premia is wide enough to provide an incentive to enter the market. But yes, risk premia "can" be fairly priced i.e implied vol on GOOGL options going into earnings.
     
    #39     Feb 23, 2017
  10. Maverick74

    Maverick74

    #40     Feb 23, 2017