"The fund, which despite its struggles... Has delivered an annualized return of 10 percent since its 1999 inception, Began this year with just $400 million in assets." 10% Big Deal. And the guy thinks he's Einstein.
The trouble with physicists as a whole is that they are physicists first and mathematicians second, often using math tools unaware if the tool is really applicable. Armed with the powerful applicability of the math, and lacking a real understanding of the foundations on which the math rests, quants build models in an almost blind manner. Nothing wrong with that, even Einstein needed help from Grossman and Hilbert. But, it took LTCM disaster to expand the definition of risk and make Nassim Taleeb a household name. Sort of: âoops, weâve just discovered non-euclidian geometryâ. Really funny.
all these whiz kids could have made much more more money for virtually no work just going long in MOS, BIDU, MA, on double margin last year...
I agree. A lot of people on ET do not understand that making 100% return a month on 5K of capital is a lot easier than making 10% a month on a 100 M or 10% a year on 10B. That "scalability" fantasy does not exist. People would not let you trade 100M or 10B if you are not market neutral! And if you are then 10% is fantastic!
There is always the 'blow up' factor associated with these exotic trading tools. You can make 10-15% a year and then have a really bad year and lose 40% even when the market is flat or up.
Exactly! And to the clown who said that quant investing began in in 80s and ended in 2006? Such untrammeled arrogance/ingnorance!
I take it that you feel that they have just been taking a break for the last two years. Would you estimate when the break is going to be over (in time or trillions, your choice)? If outsourcing is going to come on the table, when and where?