[newaccount74]

> The contra to this is some of them are billionaires, and therefore this strategy is working, but for just a few of them

I have no clue how hedge fund managers make their money, but I was under the assumption that it involved charging their clients hefty fees for managing the funds.

[hiAndrewQuinn]

I do, and that's actually incorrect in a strict sense, but it's correct-enough for the average person to follow to Vanguard et al and have a generous nest egg without a lot of risk attached.

Your intuition however is correct in the sense that there is a principal-agent problem at play with all kinds of hedge funds, where if the hedge fund manager isn't the one investing his own money he is by default incentivized to do things besides just maximizing hedge fund profits. But there are indeed managers who have such an ability to generate edge that they do in fact invest their own money solely, usually money they generated while working for other hedge fund managers before striking out on their own, and these people are terrifying forces to watch in action indeed.

[dna_polymerase]

When I read George's thought on this immediately Alexander Gerko and XTX Markets came to my mind. They operate one of the worlds largest GPU clusters (10k A100) [0].

They aren't really a hedge fund but a prop trading firm, but they seem to be winning the game [1].

[0]: https://www.stateof.ai/compute [1]: https://financefeeds.com/xtx-markets-earns-1-095-billion-in-...