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Numerai – A hedge fund built by a global community of anonymous data scientists

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Re: Numerai – A hedge fund built by a global community of anonymous data scientists

#11

Post by gravypod »

Couldn't I make thousands of fake accounts and submit thousands of slightly different models. Then after a while I could push one or two of my stocks higher in my models artificially. If you represented a large enough % of the "data scientists" in this hedge fund you could make it look like your stock is "definitely" work investment. After they invest in your company, you could take off to the hills.

Hell, you don't even need to be the owner of the company. This would be a great way to obtain large amounts of political sway/power. Like a company/want it to succeed for some agenda? Make it look better as an investment opportunity. Dislike a company? Well that stock is going to do horrible next quarter. It's also a self fulfilling prophesy.

For all of you finance people out there, is what I am saying impossible or stupid? I hope I'm wrong otherwise this is a horrible idea.

Re: Numerai – A hedge fund built by a global community of anonymous data scientists

#14

Post by Hasz »

gravypod wrote: post #11

Couldn't I make thousands of fake accounts and submit thousands of slightly different models. Then after a while I could push one or two of my stocks higher in my models artificially. If you represented a large enough % of the "data scientists" in this hedge fund you could make it look like your stock is "definitely" work investment. After they invest in your company, you could take off to the hills. Hell, you don't…

It sounds a bit like pump and dump, which is considered fraud. However, instead of being against hundreds or thousands of individual investors, you're going against one (obstinately) accredited investor, so you might be one firmer legal ground, as they should know better.

It's probably against their TOS though.

Re: Numerai – A hedge fund built by a global community of anonymous data scientists

#16

Post by lordnacho »

Hedge fund guy here.

- You need to know something about the domain in order to make sensible predictions. Is the data daily? Is it per second? Is it ticks? You can't build a sensible model if you don't know that, even if you have good predictions. Relative cost will vary a lot between timescales.

- It matters what the features are. Maybe there's some clever reason why it doesn't, but until I hear why I'm going to take the ordinary view that some features are different in nature to others. For instance maybe one feature is volatility, a thing we typically model with GARCH, while another is some fundamental like P/E, which we'd incorporate some other way.

- How are you executing the trades? It matters a lot whether you're click-trading through some broker API, automating via Excel, or running your own network of colo servers. Some things just aren't possible if you're too slow.

- If you make the data encrypted, you'd better know very well what it represents. For instance, you might take all the closing prices of the LSE stocks on a given day as inputs. You can make analyses that are valid with that, and ones that aren't, because the data you've collected do not represent a snapshot of the market at a specific time. It might sound like it does, but it doesn't on deeper inspection (market opens and closes are not simultaneous).

Does anyone know how it's going for them?

Re: Numerai – A hedge fund built by a global community of anonymous data scientists

#17

Post by gravypod »

Hasz wrote: post #14
gravypod wrote: post #11

Couldn't I make thousands of fake accounts and submit thousands of slightly different models. Then after a while I could push one or two of my stocks higher in my models artificially. If you represented a large enough % of the "data scientists" in this hedge fund you could make it look like your stock is "definitely" work investment. After they invest in your company, you could take off to the hills. Hell, you don't…

It sounds a bit like pump and dump, which is considered fraud. However, instead of being against hundreds or thousands of individual investors, you're going against one (obstinately) accredited investor, so you might be one firmer legal ground, as they should know better. It's probably against their TOS though.

Aren't the "data scientists" anonymous? Login over tor, exert some basic opsec, and live in a country with no extradition treaty. Do it as a service for billionaires who want to play the never ending game of chess that is the the economy.

For 100k per "tweak" you could make a lot of money and still give people rather significant influence over the world (especially if a LOT of people used this service).

> pump and dump, which is considered fraud

Yea it is definitely a pump and dump but if it makes you rich and you're in a country with no extradition treaty who cares? Remember the golden rule of the "elite class": laws are for poor people. As long as you get rich before anyone sees what you aredoing, and you "cant" be found, you're all good.

Re: Numerai – A hedge fund built by a global community of anonymous data scientists

#18

Post by DrNuke »

In my limited experience in London at the trading level, they do not want collective intelligence at all: they do the bulk with algorithms at very low level latencies and want outliers (unpredictable singletons are less reproducible than the average from millions heads) to run high risk - high reward books.

Re: Numerai – A hedge fund built by a global community of anonymous data scientists

#20

Post by jon_richards »

gravypod wrote: post #11

Couldn't I make thousands of fake accounts and submit thousands of slightly different models. Then after a while I could push one or two of my stocks higher in my models artificially. If you represented a large enough % of the "data scientists" in this hedge fund you could make it look like your stock is "definitely" work investment. After they invest in your company, you could take off to the hills. Hell, you don't…

If they aren't managing correlation between different models there is an even bigger issue...
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