Hedge Fund Uses Algae to Reap 21% Return
bloomberg.com
Hedge Fund Uses Algae to Reap 21% Return
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Re: Hedge Fund Uses Algae to Reap 21% Return
#2A 3 year sample does not prove anything.
Re: Hedge Fund Uses Algae to Reap 21% Return
#3[deleted]
Re: Hedge Fund Uses Algae to Reap 21% Return
#4In the chart, this is how the fund has compared to an S&P index over the past 5 years:
* 2013 - 5% over
* 2014 - 15% under (and negative overall)
* 2015 - 30% over
* 2016 - 10% over
* 2017 - About even
Re: Hedge Fund Uses Algae to Reap 21% Return
#5Boo, he basically got lucky twice, once on Brexit and once on Trump's election; he'll raise a bunch of money for his fund, lose much of it and be out of business in a few years when his model fails because luck isn't a strategy.
Re: Hedge Fund Uses Algae to Reap 21% Return
#6From the chart in the article:
Year Market Algae
2013 +16% +22%
2014 +14% -2%
2015 +2% +33%
2016 +12% +22%
2017* +9% +10%
Re: Hedge Fund Uses Algae to Reap 21% Return
#7> As the genome project produced reams of data, Lun saw an opportunity to break ground in computational biology and in 2006 joined the Broad Institute of MIT and Harvard, a crossroads for scientists and hedge fund managers. There Lun met senior computational biologist Nick Patterson, a former cryptographer who had spent a decade at Renaissance Technologies making mathematical models. Another Lun colleague, genomic researcher Jade Vinson, left Broad for the same pioneering quant hedge fund for 10 years.
Well he is certainly surrounded by some impressive people.
I think at this point in the search for alpha, wall street has employed applied mathematicians, physicists, code breakers, engineers, economists, chemists, computer scientists, sociologists, and now computational biologists.
Each one of them brought some new/novel mathematical techniques to the field. Do Medieval Historians learn any specialized math?
Maybe he can beat the market reliably but he's only managing $20 million. The big question every quant fund asks is can this strategy provide alpha at a salable level of investment.
A 3 year track record is plenty long enough to prove out a system and provide a track record. It's a troubling sign that there is only $20 million in his fund if.
Re: Hedge Fund Uses Algae to Reap 21% Return
#8I guess I'm a bit skeptical. The article doesn't address how the fund managed to lose 2% in a year when holding an S&P 500 index fund would've gotten a 10+% return, and in general we just need more data before we can conclusively say that this has an edge on the market.
I also did not understand why cells specifically provide such good insights for markets, as compared to any other complex natural system (like weather or ecological systems).
Re: Hedge Fund Uses Algae to Reap 21% Return
#9Boo, he basically got lucky twice, once on Brexit and once on Trump's election; he'll raise a bunch of money for his fund, lose much of it and be out of business in a few years when his model fails because luck isn't a strategy.
Importantly, he'll make plenty in fees in the meantime!
Re: Hedge Fund Uses Algae to Reap 21% Return
#10I can't tell if this suggesting he uses models that were made to predict algae growth or if he is using algae/bio/genetic inspired optimization algorithms. But either way he is certainly not "using" algae.