[throwawaymath]

No, that wouldn't work. The options basket strategy you refer to did have nontrivial tax advantages, but

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.