For what it's worth, I sensed a bit of insider-type trading occurring at the bigger hedge funds in the sense that they influence politics to go in ways that will make their investments pay off. C.f. Paulson's affiliation with Trump for a particularly egregious example. Maybe Simmons hires all those PhDs as a distraction tactic and is really backchanneling all his investments from an E-Trade account.
I think only a select group of people know what really is the essence of the system. I am sure there are lot of cover ups to protect what they do. I am sure that most people who work there have no idea about the whole picture. If even small traders try to hide things by working with several brokers, adding fake trades, switching open positions to some where else to avoid that the trade as a whole can be analyzed, why should the real big ones not do that or even more complex things? Thinking they show everything would be very naive.
Again, apparently according to him, they have a very open collaborative atmosphere. I'd expect more reviews on glassdoor if this was way off the mark. If they are truly the best math/physics/statistics research department in the world, then the people they have must be very happy. If people went there thinking that this was the case and they were mistaken, I'd expect people to be PISSED. Rentec: # of employees according to LinkedIn: 622 - https://www.linkedin.com/company-beta/17806/ Bridgewater: # of employees according to LinkedIn: 1000-5000 (It was 1500 before they cut back recently): https://www.linkedin.com/company-beta/11877/ Compare Rentec reviews: https://www.glassdoor.ca/Reviews/Renaissance-Technologies-LLC-Reviews-E19369.htm With Bridgewater: https://www.glassdoor.ca/Reviews/Bridgewater-Associates-Reviews-E117647.htm So Rentec has a culture of secrecy, and Simons HAS said that he cannot give away what they do or how they do it. Are the people who work there intimidated into being quiet? I doubt it. Even if Rentec is big, they're not bigger than the law. Bridgewater, in particular, has a very well known non-disparagement clause in their agreements and lo and behold, people don't give a fuck and Dalio's fund is a 2-3x the size of Simons. I think why Rentec keeps their secret a secret is because (apparently) they have a significant form of employee ownership: you get to invest in a fund that returns 50%. If collectively, you make big bucks when the company makes big bucks... With proper filtering, you could probably keep a lot of people happily quiet in public. With all we know about math, statistics and the markets, is it really that far fetched that these guys have perfected a system using these disciplines that evolves itself for finding temporary inefficiencies? I don't think so. I'm willing to believe it because that's the only thing, besides egregious insider trading, that makes sense.
even Rentec has its own limit there's only so much money you can make without breaking the very system you are standing on
That's nothing compared to Buffett's bailout cheerleader role in the Obama administration after investing in GS in 2008. He even helped craft legislation and his Berkshire Hathaway companies received $95 billion from TARP.
During training at the hedge fund, there was a specific question from my cohort: "But... with all the connections to government X, couldn't $HEDGE_FUND actually influence the market?" Response: "Yes, now let's move on." Probably more pervasive than we would care to admit.
%% Good points. I thought of the old news, top trader Gary Bielfeldt. Sounds like he did fine with his trading[ mostly, fine,long term....], fine Jack Schwager interview, fine with his foundation; but the IRS fined him severely. [ Google Forbes article + IRS online.....]
Actually, what distinguishes them from most other quant houses is not the alpha, it's the super-alpha management via smart risk (and resource) allocation. Think "collaborative multi-strat setting" - one of those tricky things that requires more than just good PMs with good alpha, it requires a culture that's very hard to build.