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by doctorpangloss
2415 days ago
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> anyone has insight In a world where all their statistical arbitrage has ceased to be viable, financial professionals believe that the outsize returns of the Medallion fund in recent history are siphoned from their institutional funds via shell games. Then, their famous ability to make money even in down markets is attributed to how they smooth out an extremely profitable short term trade, that may have occurred years ago, over the course of many years. This sort of surfaced in their tax avoidance lawsuit too. You too can make a "Medallion Fund." First, make a venture investment in something that turns out to be Facebook. Keep that equity secret, even when Facebook goes public. All that time, say that your fund has gained 15% year over year, even during a recession. Do this for years until you have taken your 2% management fee to your liking. You've turned your 200x return that happened all at once into something that looks like the world's greatest hedge fund. Lawfully of course. |
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1) Those tax advantages can only improve returns which are already fundamentally strong, and
2) There is no "smoothing" effect achieved; the options baskets do not defer returns for years at a time.
I get that the cynical take is, as ever, the attractive one on Hacker News. But speaking frankly, what you're saying doesn't actually make sense. Among other problems with your explanation, there's a straightforward wrinkle. While it's not available to the general public, other institutions like Bloomberg and WSJ have had (and still have) access to audited attestations of Medallion's track record over a timespan of 25 years.