Quant Investor Cliff Asness Hasn’t Smashed His Screen This Year Yet • Hacker News Board

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

#21

Post by jshaqaw » Sat, Oct 06, 2018, 12:36 PM UTC

colechristensen wrote: post #10

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…

Pricing resources/companies/commodities/etc has value, it makes the economy more efficient allocating resources in the right place and motivating people to do things which are needed more. Finance helps accomplish this but with overhead. Finance tends to have power over itself and there is little motivation to minimize itself because there isn't a third party checking its power. So "finance" is a tax on everything ev…

Propose a viable realistic alternative.

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

#22

Post by colechristensen » Sat, Oct 06, 2018, 8:12 PM UTC

jshaqaw wrote: post #21

colechristensen wrote: post #10

Earlier quoted context omitted.

Pricing resources/companies/commodities/etc has value, it makes the economy more efficient allocating resources in the right place and motivating people to do things which are needed more. Finance helps accomplish this but with overhead. Finance tends to have power over itself and there is little motivation to minimize itself because there isn't a third party checking its power. So "finance" is a tax on everything ev…

Propose a viable realistic alternative.

Educate everybody better so they understand complex topics a little more.

Not that that is viable or realistic.

Until we have politicians and a voting population discussing actual issues instead of whatever is happening now, there are no realistic viable alternatives. (and it's not hard to believe that many powerful, influential, intelligent people are intentionally pushing politics to be foolish so that nobody has any interest in improving real issues)

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

#23

Post by dnadler » Thu, Oct 11, 2018, 6:51 PM UTC

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…

Efficiency and liquidity are not the same thing.

Liquidity is important, but efficiency is more important. When we identify fraudulent companies, for example. The sooner the better, right?

Or, when we identify the next Google, and give them the resources (money) they need to build a new world-changing product. The sooner the better, right?

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

#24

Post by dnadler » Thu, Oct 11, 2018, 6:58 PM UTC

colechristensen wrote: post #10

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…

Pricing resources/companies/commodities/etc has value, it makes the economy more efficient allocating resources in the right place and motivating people to do things which are needed more. Finance helps accomplish this but with overhead. Finance tends to have power over itself and there is little motivation to minimize itself because there isn't a third party checking its power. So "finance" is a tax on everything ev…

Investment professionals charge a fee (the tax you mention) because, in theory, they are at least that much better than the layperson investing. This hasn't always been true, and many active managers have been shown to be no better at generating returns than the market.

There are other objectives for investors than just total return, like risk management, that justify fees in many cases.

> Bottom line: in making markets more efficient, the financial industry makes the economy as a whole a lot less efficient by siphoning off a huge chunk to feed itself.

That's a huge leap that absolutely requires some evidence to back up. This is the typical argument, but it's not convincing without any data, and just plays to the emotional "finance is evil" crowd.