That's really nice of Goldman. If there was ever somebody that should be forced out of trading, it ought to be those crooks. Hey, maybe they'll get so big that the government will force them to split into 10 small goldmans, like they did with ATT!
what all this says about edge though, it that there is much more to edge than the mathematical expectation of a system, and technological edge, milliseconds and all that edge is much more than, in the real world. access to very high-quality information (sometimes illegal, sometimes legal), not available to the average cnbc viewer or to the average yahoo finance. connections, closed clubs now that's edge i think these people (the elite traders, let's call them) are better equipped than the average joe trader. good for them, bad for joe trader
he's been here for 5 yrs and been told many times to do it properly but chooses to play ignorant. He ain't gonna start doing it right now.
Go to Deepcapture.com, and read "when the bad guys came to town." See what Michael Steinhardt's "edge" was." I believe he coined the term. Check it out.
This is a suprise, Pequot Capital Management were supposed to be the best at pcking stocks, they were deemed to be a credit to the industry by many.
Because of the rational and detailed responses in this thread, and despite the apparent front running and other illicit activities Pequot was apparently involved in, I have reassessed my views of Pequot, and realize I had them pegged wrong and gave them too much credit. I always viewed them modeling themselves after Berkshire, with their proclaimed 'open and frank' investor meeting and Q&A sessions. It would appear it was all an illusion, after all.
Let your mind wander. Do you really think a fund can go from a billion to 14 billion and still return 40% per annum? I don't. Neither do the Feds. They just needed a catalyst to ask the right questions. The collapse of the Western economies seemed to be that ticket. You dont think Samberg stepped down for some altruistic higher callling, do you?
"Several former SEC enforcement division lawyers say the initial closing of the Samberg investigation, which also involved other prominent Wall Street figures, was in keeping with the SECâs longtime hands-off treatment of hedge funds" http://www.boston.com/business/markets/articles/2009/09/06/renewed_case_peers_at_hedge_fund/?page=1 someone who would know of such things told me. "It's all sleight of hand. None of them ever do an honest trade." So, I'm sure they've done a few, but for the most part, the entire industry is a fraud.