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Quant Investor Cliff Asness Hasn’t Smashed His Screen This Year Yet

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Re: Quant Investor Cliff Asness Hasn’t Smashed His Screen This Year Yet

#11

Post by tcbawo »

ArchBang wrote: post #6
dnadler wrote: post #4

Earlier quoted context omitted.

>For good reason. It's amazing the amount of intelligence and effort that gets wasted in finance. (Other fields too of course.) Whenever I hear someone say this, I never see an explanation for why it's actually a waste. People are usually just jumping on the 'finance is evil' bandwagon. Well, capital markets are vitally important to the global economy, and the presence of investors like AQR are a huge reason why mark…

When I was working at a quant hedge fund which was adding very little to actual efficient allocation of capital in the world I came across many an accomplished researcher who wanted switch from academia largely because it was just that much more lucrative. One person for example was coding the creation of better medical lenses at a top university and had been subsidised by state prizes to the tune of hundreds of thou…

Lots of people found charities or start businesses once they've created a wealth base. If this person makes millions in finance, he/she just might found a lab or create a medical lense startup in the future. It might eventually be more effective than begging for government grants.

Re: Quant Investor Cliff Asness Hasn’t Smashed His Screen This Year Yet

#13

Post by otabdeveloper1 »

dnadler wrote: post #4
frgtpsswrdlame wrote: post #2

“I’ll still wake up sweating once a year, worrying that we’ve just gotten lucky forever” For good reason. It's amazing the amount of intelligence and effort that gets wasted in finance. (Other fields too of course.)

>For good reason. It's amazing the amount of intelligence and effort that gets wasted in finance. (Other fields too of course.) Whenever I hear someone say this, I never see an explanation for why it's actually a waste. People are usually just jumping on the 'finance is evil' bandwagon. Well, capital markets are vitally important to the global economy, and the presence of investors like AQR are a huge reason why mark…

Google employs 70000 people, when in fact they could do what they do with just 700. (If they bothered to actually hire the top 1% of developers.)

Operating with 1% of peak efficiency seems insane, until you understand that Google doesn't hire people to make products, they hire people to increase their market cap.

This is a delusional system that is opposite of 'market efficiency'.

Eventually the system will collapse in a horrific crash and we'll start over with something that doesn't violate common sense or laws of physics. For now all you can do is grin and take it.

Re: Quant Investor Cliff Asness Hasn’t Smashed His Screen This Year Yet

#14

Post by pongogogo »

kitcar wrote: post #9
dnadler wrote: post #4

Earlier quoted context omitted.

>For good reason. It's amazing the amount of intelligence and effort that gets wasted in finance. (Other fields too of course.) Whenever I hear someone say this, I never see an explanation for why it's actually a waste. People are usually just jumping on the 'finance is evil' bandwagon. Well, capital markets are vitally important to the global economy, and the presence of investors like AQR are a huge reason why mark…

A hedge fund manager told me the whole investment industry is a net cost of 1-2% of global GDP per annum. I don't specifically what study that number came from, but if true its likely one of the main reasoms many see it as a waste.

If you computed a weighted average of all hedge fund returns, you would get a global contribution to GDP. Since hedge funds often don't publish their returns, and it's well known that there's huge amounts of survivorship bias in the data, it would be very difficult to measure accurately. My feeling though is that the contribution would be close to zero, as most of the strategies they pursue are arbitrage based and are zero sum, not wealth creating (with some known exceptions, such as venture capital etc).

Re: Quant Investor Cliff Asness Hasn’t Smashed His Screen This Year Yet

#15

Post by radiantswirl »

otabdeveloper1 wrote: post #13
dnadler wrote: post #4

Earlier quoted context omitted.

>For good reason. It's amazing the amount of intelligence and effort that gets wasted in finance. (Other fields too of course.) Whenever I hear someone say this, I never see an explanation for why it's actually a waste. People are usually just jumping on the 'finance is evil' bandwagon. Well, capital markets are vitally important to the global economy, and the presence of investors like AQR are a huge reason why mark…

Google employs 70000 people, when in fact they could do what they do with just 700. (If they bothered to actually hire the top 1% of developers.) Operating with 1% of peak efficiency seems insane, until you understand that Google doesn't hire people to make products, they hire people to increase their market cap. This is a delusional system that is opposite of 'market efficiency'. Eventually the system will collapse…

Very interesting. I don't fully understand this. How does having more employees increase their market cap?

Re: Quant Investor Cliff Asness Hasn’t Smashed His Screen This Year Yet

#16

Post by Latteland »

otabdeveloper1 wrote: post #13
dnadler wrote: post #4

Earlier quoted context omitted.

>For good reason. It's amazing the amount of intelligence and effort that gets wasted in finance. (Other fields too of course.) Whenever I hear someone say this, I never see an explanation for why it's actually a waste. People are usually just jumping on the 'finance is evil' bandwagon. Well, capital markets are vitally important to the global economy, and the presence of investors like AQR are a huge reason why mark…

Google employs 70000 people, when in fact they could do what they do with just 700. (If they bothered to actually hire the top 1% of developers.) Operating with 1% of peak efficiency seems insane, until you understand that Google doesn't hire people to make products, they hire people to increase their market cap. This is a delusional system that is opposite of 'market efficiency'. Eventually the system will collapse…

That comment is hard to understand, please explain, it seems irrational. Why would Google hiring 69,300 useless engineers increase their market cap?

Re: Quant Investor Cliff Asness Hasn’t Smashed His Screen This Year Yet

#17

Post by xapata »

dnadler wrote: post #4
frgtpsswrdlame wrote: post #2

“I’ll still wake up sweating once a year, worrying that we’ve just gotten lucky forever” For good reason. It's amazing the amount of intelligence and effort that gets wasted in finance. (Other fields too of course.)

>For good reason. It's amazing the amount of intelligence and effort that gets wasted in finance. (Other fields too of course.) Whenever I hear someone say this, I never see an explanation for why it's actually a waste. People are usually just jumping on the 'finance is evil' bandwagon. Well, capital markets are vitally important to the global economy, and the presence of investors like AQR are a huge reason why mark…

How much liquidity is optimal? After a point, it increases turbulence more than efficiency. There's always a trade-off.

Re: Quant Investor Cliff Asness Hasn’t Smashed His Screen This Year Yet

#18

Post by ArchBang »

tcbawo wrote: post #11
ArchBang wrote: post #6

Earlier quoted context omitted.

When I was working at a quant hedge fund which was adding very little to actual efficient allocation of capital in the world I came across many an accomplished researcher who wanted switch from academia largely because it was just that much more lucrative. One person for example was coding the creation of better medical lenses at a top university and had been subsidised by state prizes to the tune of hundreds of thou…

Lots of people found charities or start businesses once they've created a wealth base. If this person makes millions in finance, he/she just might found a lab or create a medical lense startup in the future. It might eventually be more effective than begging for government grants.

Perhaps, though that starts a long line of big ifs, and the wealth to solve a great deal of the world's problems already exists - a vast chunk of it just spins in various shadowy games.

I tend to think there are better ways for bettering society than philanthropy though, and these vary wildly in effectiveness. In this case the millionaires in this fund focused primarily on some cancer charities. I understand that these tend to resonate emotionally since everyone is at risk, but really they are quite suboptimal ways of channeling funding relative to the needs of the world or maximising ethical return on investment.

Re: Quant Investor Cliff Asness Hasn’t Smashed His Screen This Year Yet

#19

Post by b_tterc_p »

otabdeveloper1 wrote: post #13
dnadler wrote: post #4

Earlier quoted context omitted.

>For good reason. It's amazing the amount of intelligence and effort that gets wasted in finance. (Other fields too of course.) Whenever I hear someone say this, I never see an explanation for why it's actually a waste. People are usually just jumping on the 'finance is evil' bandwagon. Well, capital markets are vitally important to the global economy, and the presence of investors like AQR are a huge reason why mark…

Google employs 70000 people, when in fact they could do what they do with just 700. (If they bothered to actually hire the top 1% of developers.) Operating with 1% of peak efficiency seems insane, until you understand that Google doesn't hire people to make products, they hire people to increase their market cap. This is a delusional system that is opposite of 'market efficiency'. Eventually the system will collapse…

This doesn’t make any sense. Imagine you have the 7,000 best employees and your ops are smooth. You are told that #7,001 will net improve the business. Are you delusional to hire that person? Or do you think that a profitable 7001th person does not exist?

Re: Quant Investor Cliff Asness Hasn’t Smashed His Screen This Year Yet

#20

Post by jshaqaw »

pongogogo wrote: post #14
kitcar wrote: post #9

Earlier quoted context omitted.

A hedge fund manager told me the whole investment industry is a net cost of 1-2% of global GDP per annum. I don't specifically what study that number came from, but if true its likely one of the main reasoms many see it as a waste.

If you computed a weighted average of all hedge fund returns, you would get a global contribution to GDP. Since hedge funds often don't publish their returns, and it's well known that there's huge amounts of survivorship bias in the data, it would be very difficult to measure accurately. My feeling though is that the contribution would be close to zero, as most of the strategies they pursue are arbitrage based and ar…

Arbitrage is another way of saying eliminating mispricings. Mispricings or traded assets causes a misallocation of societal resources in ways which are negative to economic growth. You need to think second order here.
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