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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

#91

Post by xg15 »

throwaway98237 wrote: post #8
bigdubs wrote: post #6

Earlier quoted context omitted.

Monkeys throwing darts at the board. This brings to mind the Buffett hedge fund wager, where he invested in a vanguard s&p 500 tracking fund (VFIAX) and a hedge fund actively managed an equal amount, and Mr. Buffett ended up winning handily.

Really smart monkeys. And monkeys which will (hopefully) be self-correcting to converge on the bulls-eye. Most people don't realize that the "markets" are 49% random, 48% sentiment driven, and 3% fundamentals. If you approach the problem with that assumption held true, monkeys throwing darts isn't such a horrible mechanism for investing. See: "Monkeys Are Better Stockpickers Than You'd Think: Why dart-throwing primat…

> Most people don't realize that the "markets" are 49% random [...] If you approach the problem with that assumption held true, monkeys throwing darts isn't such a horrible mechanism for investing.

Maybe I haven't understood that part of data science but I never got why throwing more unpredictability on an already unpredictable data source would somehow make it more predictable.

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

#92

Post by nathan_f77 »

jamez1 wrote: post #82
Houshalter wrote: post #79

Earlier quoted context omitted.

It's very weird to call data normalization "encryption". This is just a standard procedure done on most datasets. Encryption implies they've gone to extra processing to make sure you can't figure out what the variables mean. I think it's either an abuse of the word 'encryption'. That, or they really have done something weird to this dataset. Which will probably make it useless for statistical algorithms. Even normali…

They only need to go as far as to obfuscate the market data this was derived from, so they don't have to pay exchange licencing fees. It doesn't have to have an exponential time complexity on decryption to qualify as 'encryption'. Multiplying by 2 could be considered homomorphic encryption. You might think encryption means something else and that it's an abuse of the word but unlike the spy novella that you derive th…

> They only need to go as far as to obfuscate the market data this was derived from, so they don't have to pay exchange licencing fees.

Thanks for explaining this, I was struggling to figure out the difference between this and https://www.quantopian.com/

That's actually pretty clever.

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

#94

Post by hueving »

inimino wrote: post #89
hueving wrote: post #88

Earlier quoted context omitted.

>It really don't matter how much "money" you have in your account when your city sinks under the ocean.. You just move. That's what money enables. No city is going to sink so rapidly people just drown.

So you're literally arguing that we just need to focus on making money, and ignore things like the environment? Yep, sounds about like a textbook example of "unwise" to me.

Nope, just pointing out how stupid the conclusion is that the poster made.

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

#95

Post by zer0gravity »

delegate wrote: post #26

"It's just a pure math problem. It's like a math competition. You don't need to know anything about finance, you don't know anything about hedge funds... you don't even have to speak English..." This is not a pure math problem. Eventually the outcome of all these models and predictions affects the stock prices and - if it becomes as successful as you hope - the economy as a whole. And the physical world: people, anim…

I'm currently watching George Soros's lectures on his reflexivity theory appliend to financial markets [1], where it explains why their evolution is not easy to model due to "human uncertainty principle", which postulates that our actions, based on incomplete and distorted data make things unpredictable.. It makes a lot of sense.

[1] - https://www.youtube.com/watch?v=RHSEEJDKJho

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

#96

Post by austinjp »

hueving wrote: post #88
delegate wrote: post #87

Earlier quoted context omitted.

> What makes you think that the people using applied statistics to make money are "unwise"? Because it is an incredible waste of talent. I know this is in contradiction with all the 'values' that have been drilled into our minds since we were born, but it's about time we wake up and reorder our priorities. >Based on your tone, I would guess that it's because what they're doing doesn't agree with your folk definition…

>It really don't matter how much "money" you have in your account when your city sinks under the ocean.. You just move. That's what money enables. No city is going to sink so rapidly people just drown.

What of the poor whose villages are (in effect) being sunk by the rich, or destroyed in various other creative ways?

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

#97

Post by usgroup »

delegate wrote: post #26

"It's just a pure math problem. It's like a math competition. You don't need to know anything about finance, you don't know anything about hedge funds... you don't even have to speak English..." This is not a pure math problem. Eventually the outcome of all these models and predictions affects the stock prices and - if it becomes as successful as you hope - the economy as a whole. And the physical world: people, anim…

The data is encrypted. There are a set of factors in sequential order. You know little more. So for instance it's not obvious that the predictions are of stock prices at all.

They are in effect crowd sourcing curve fitting because the number of possible models for this maths problem is so large.

Think of crowd sourcing here as a pruning heauristic in a search problem.

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

#98

Post by dharma1 »

jimfleming wrote: post #4

Spent some time experimenting with Numerai. Really fun competition, clean (encrypted) dataset, and Bitcoin payouts. I wrote about my experience and open-sourced all of the models here[0] if you're looking to get started. [0] https://github.com/jimfleming/numerai

Awesome. Thanks for the write up

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

#99

Post by dharma1 »

pjlegato wrote: post #78
dsacco wrote: post #10

Earlier quoted context omitted.

It's easy to be dismissive of this, especially by working from the popular Warren-Buffet-index-funds-beat-hedge-funds story that makes the rounds. It's true that most hedge funds and active traders lose money (or at least, underperform the market). But as I am fond of pointing out, there are a non-negligible number of funds and traders who consistently and demonstrably earn significantly stronger returns than the mar…

They are betting that there exist people who are capable of performing that work who cannot work at a hedge fund, for whatever reason. Perhaps they live in the wrong location -- it's hard/impossible to get a quant job if you don't live in a major market center. Not everyone is 23 years old and unattached and prepared to move around the world for a job. Perhaps they can do the predictions but they didn't go to a high…

Or people who do work at hedge funds, but want to moonlight on the side and get paid via bitcoin anonymously

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

#100

Post by dharma1 »

daveguy wrote: post #50
zitterbewegung wrote: post #3

Why should I think that being anonymous should give some advantage ? I think it would be more of a disadvantage due to should I trust you? Also, how do I know these people are truly anonymous ?

Anonymous in the sense that numerai does not ask for any personally identifying information. You could easily prove you are who you say you are in numerai. Also, I think the big benefit from a data scientist working on this is you can test methods with generic features, submit the results and get paid if they are good, but not submit any part of the methodology to any third party. If you can kill it on numerai then m…

That's what I thought - if you are smashing it on numerai, wouldn't you be better off raising some capital for your own fund to scale it?
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