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by j245 1232 days ago
Hedge funds are parasites, they are an edge case in capitalism that needs to be patched.

I can’t think of anything else that takes so much, while adding nothing to society.

1 comments

They provide asset management and investment opportunity.

Not all hedge funds are malicious.

We can also see issues in tech that are similar. Look at all the hate Meta gets for their business model - using addicting algorithms to gather and sell users' info. There can certainly be an argument made here about the potential societal damage they cause being a parasite.

This is a common argument I hear, it just doesn’t hold water.

We should absolutely hold Big Tech accountable for their business models and actions.

On the whole though, they have released many orders of magnitude more useful things than Hedge Funds.

Is there a Citadel Maps I can use ? Or a TwoSigma framework like React ?

At least Big Tech has ad-powered useful services.

Hedge funds gobble up PhD holders and the cream of the crop and use them to make 0.1% of the population 5% wealthier ?

"On the whole though, they have released many orders of magnitude more useful things than Hedge Funds."

Well no shit - you're comparing an entity that creates "things" to one that doesn't!

"gobble up PhD holders and the cream of the crop and use them to make 0.1% of the population 5% wealthier"

Um, Google does this with data scientists. Maybe they do create a useful app, but make no mistake that their primary goal is to make the stock owners (mostly the top 1%) richer off the backs of their unsuspecting users.

You’ve missed the point…

An entity that puts nothing into the host system, but consumes resources from the host to fatten itself is a parasite.

In the case of hedge funds, it’s a zero-sum game. Either you or the counter party lose depending on how the bet goes. In aggregate, society gets nothing, but the cost of the net zero value is high (highly skilled people, taking resources away from other things). It’s profitable but net useless.

In the case of Google Maps, no one has to lose for me to make a journey. It’s profitable and useful.

Saying, ohh but they both operate in a capitalistic system to make money for shareholders is not relevant.

How is that money generated ?

"An entity that puts nothing into the host system, but consumes resources from the host to fatten itself is a parasite."

You seem to miss how the system works. Those companies are where they are today because of financing. Stock purchases, including demand for existing shares drives that.

"In the case of Google Maps, no one has to lose for me to make a journey."

No, you trade your data (lose privacy) for that journey.

> You seem to miss how the system works…

Yea, the way it works with hedge funds is, do whatever it takes to make a profit, underlying company be damned - see naked shorting GME.

Where is the “financing” in that?

What about all the companies that “got to where they are now” aka dissolved because shorting to oblivion would generate a profit ?

The fact you are scraping the bottom of the barrel and claiming that just buying stock = increasing demand = creating value should be a red flag.

“No, you trade your data”

How exactly does that happen in offline mode ?