321–330 of 338 posts
Pretty good run for an adult life-long heavy smoker.
Earlier quoted context omitted.
> Then he empirically disproved the strong-form EMH Not clear as we do not really know exactly how RenTech works. It is believed that there are substantial tax loopholes that were taken advantage of - which would go a long way (not all the way) to explaining the incredible performance of his fund.
Rentec gets a lot of leverage and gets ridiculous pricing on option trades from the banking desks because of the flow they bring.
So do about 200 other funds world wide. Their leverage and sell side pricing isn't what makes them successful, as most other large funds trade as much as them and get atleast the same pricing as they do.
Earlier quoted context omitted.
How difficult is to run a glorified BBS over HTTP/HTML like that? Like seriously? It's not as difficult as the stuff being published there.
I’ve noticed this cycle for the past 30 years on the internet where a useful thing starts out really simply (host a BBS, or host a billion pdfs forever). It’s not trivial, but it seems like it should be pretty low resource. Then people get hired and are into it and want to get paid (as people do). And costs go up. And slowly more people get added. And instead of looking for cheap ways to operate, they want to fund th…
Earlier quoted context omitted.
Those senators just trade on their own behalf because its not illegal to. Why would they involve their spouse? If it was illegal for them to trade but their spouse made a trade it would be trivial for the SEC to trace it back to intel they learned.
It is illegal. https://www.congress.gov/bill/112th-congress/senate-bill/203... You are right that enforcement is weak, but that is not because it is legal. The notion that members of Congress can legally trade on knowledge derived from or used in the performance of their duties has not been true for over a decade at this point.
No congress can trade on insider information full stop
https://blogs.luc.edu/compliance/?p=4459
> Simply put, insider trading is illegal. But, if you are a member of Congress, there is a loophole. Members of Congress and their families are allowed to trade stocks with almost no limitations. There isn’t a limit on lawmakers trading stocks based on classified information nor is there oversight regarding the trades that lawmakers are allowed to make based on other information they are privy to as part of their job. This is in glaring contrast to the strict insider trading laws that ban the same kind of behavior of everyone else in the county.
Earlier quoted context omitted.
Rentec gets a lot of leverage and gets ridiculous pricing on option trades from the banking desks because of the flow they bring.
> Rentec gets a lot of leverage and gets ridiculous pricing on option trades from the banking desks because of the flow they bring. So do about 200 other funds world wide. Their leverage and sell side pricing isn't what makes them successful, as most other large funds trade as much as them and get atleast the same pricing as they do.
Leverage makes a huge difference. If a strategy nets on average 0.1% a day and if RenTec can trade at 2x more leverage than their counterparts, they will post 60% pa vs 30% pa.
Earlier quoted context omitted.
Insurance is positive-sum because the value-generating enterprise (the buyer) gets to continue generating value after the unexpected thing happen. The alternatives is that the value creation process just stop. It is only seemingly zero-sum for the point in time when the accident happens and one side has to pay for the other.
Your argument only works for catastrophic insurance. In practice, people take out insurance even for events that would not put them out of business. Btw, if you are talking about 'value-generating enterprises', ie businesses as buyers of insurance, then your argument doesn't really work either, or at least not without caveats: When a business suddenly has a large liability, and it goes bankrupt, all that happens is t…
I am not saying that ALL insurances provide values. Like any other kind of trades, you can lose values if you make a bad decision. That does not make insurance inherently zero- or negative-sum.
> When a business suddenly has a large liability, and it goes bankrupt, all that happens is that the equity owners are wiped out and the creditors take over. The underlying business can and often does continue uninterrupted, and has approximately the same value as a going concern as before.
This assumes the original owner brings no value to the business. Even in that case, the disruption itself is harmful, not to mention the assumption that bankrupted business can restructure rather than closing down.
Earlier quoted context omitted.
> Rentec gets a lot of leverage and gets ridiculous pricing on option trades from the banking desks because of the flow they bring. So do about 200 other funds world wide. Their leverage and sell side pricing isn't what makes them successful, as most other large funds trade as much as them and get atleast the same pricing as they do.
RenTec’s volume is much higher. They are the sheikhs of the street. Leverage makes a huge difference. If a strategy nets on average 0.1% a day and if RenTec can trade at 2x more leverage than their counterparts, they will post 60% pa vs 30% pa.
Economists are stupid or wrong or bought. Or all of the above.
Friedman? Come back when you’ve got someone better.
Earlier quoted context omitted.
Important to keep in mind that these returns ceased to be compounding quickly: they restarted from scratch 10bn each year to score 30%. Successful quant stratégies tend to hit capacity limits...
Their success is limited by what other party ready to lose, most of the time, these all are zero sum games.
One of the genious thing that rentech did was long out of the money bonds, and short newly issued bonds. Seems like such a simple strat, but when you crank up the leverage you can make alot of money.
Earlier quoted context omitted.
Your argument only works for catastrophic insurance. In practice, people take out insurance even for events that would not put them out of business. Btw, if you are talking about 'value-generating enterprises', ie businesses as buyers of insurance, then your argument doesn't really work either, or at least not without caveats: When a business suddenly has a large liability, and it goes bankrupt, all that happens is t…
Events that merely reduce the productivity of your business has the same calculus: insurance helps you get back to speed quickly, and there are values in doing so. I am not saying that ALL insurances provide values. Like any other kind of trades, you can lose values if you make a bad decision. That does not make insurance inherently zero- or negative-sum. > When a business suddenly has a large liability, and it goes…
Closing down the business doesn't necessarily mean very much: all the machines, and workers and real estate and building still exist, whether the business closes or not.
Earlier quoted context omitted.
sadly, the trend for these sorts of things is to sour after the original founder leaves... There is an esoteric concept that has some dynamics that explain this phenomenon somewhat. Not to get to into the weeds (the origins of this concept are esoteric religious ideas - I mean this secularly, as it relates to business entities) but the concept is an 'egregore' https://en.wikipedia.org/wiki/Egregore#:~:text=An%20egreg…
Thank you for not dragging us into the weeds of esotericism. What is the source for the quotation in your post?