
Andreessen Horowitz, Point72 Invest in Crowd-Sourced Quantopian - sdouglas
http://www.bloomberg.com/news/articles/2016-11-14/andreessen-horowitz-point72-invest-in-crowd-sourced-quantopian
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chollida1
> “I think of Quantopian as the next-generation BlackRock,” said Alex Rampell,
> a general partner with Andreessen Horowitz, who will be joining Quantopian’s
> board. “They can become a very large asset manager, but hopefully in a way
> that no one else can replicate by aggregating and harnessing the best
> talent.”

Hmmm.....

The thing is, until you actually manage money you can't really tell if you
have alpha or if you are one of the million monkeys typing out a novel on a
typewriter.

Are there people who aren't currently at funds who could be awesome quants?

    
    
      Absolutely.  Just working on the markets as a full time job is a large part of succeeding.
    

Can some of these strategies that quantopian users are coming up whit make
money?

    
    
      Of course, alpha is everywhere.
    

The biggest hurdle is again taking the theory and putting it into practice.
And then redoing it year over year. I mean making money from 2008 until now
isn't really proof of much as the market has been up and to the right almost
the entire time.

I don't want to sound really dismissive, but until a quantopian fund
successfully manages say 200 million with returns of S&P + 5% over a period of
say 5 years its probably best to cool the hype:)

And I say this as someone who is a big fan of what they are doing. It's just
in finance you see alot of hype and you learn very quickly, that the
scoreboard is everything, nothing cuts through bullshit faster than actual
returns data net of fees.

I've written alot about quantopian and them turning themselves into a fund of
sorts if anyone is interested.

[https://news.ycombinator.com/item?id=12335272#12336086](https://news.ycombinator.com/item?id=12335272#12336086)

[https://news.ycombinator.com/item?id=12171843#12173142](https://news.ycombinator.com/item?id=12171843#12173142)

[https://news.ycombinator.com/item?id=11207569#11211122](https://news.ycombinator.com/item?id=11207569#11211122)

~~~
qwrusz
Agree with your points. And also skeptical of the BLK comment - though for a
venture capitalist joining the board, making this investment sound like it's a
future $60B market cap firm is par for the course.

I'm in the industry as well, and I see recruiting _and_ training of new quants
to be very inefficient and very expensive right now. I've met for coffee with
PhDs in Physics with job offers already from HFs in hand and their first
question to me is "what does a quant HF trader do?"

What are your thoughts of Quantopian becomes used more for recruiting and
training quants for other HFs than as an asset manager itself?

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inthewoods
I'm a fan of Quantopian's product but I don't understand why anyone would
invest this kind of money in their solution. They'd have to manage an enormous
amount of money to have any reasonable growth. Add to this that the hedge fund
world is consolidating, I just don't see the value. What's the out here? I
think management fees are going to close to zero soon (if they are not there
already).

~~~
meritt
A) Recruit, hire, and train a handful of quants, pay them $250k/yr+ each, and
hope they bring a positive edge to your algorithmic trading.

B) Award $10,000 to the winner(s) among _hundreds_ of participants
aggressively competing to solve the same problem as your expensive employees
from A.

Which would you choose?

~~~
inthewoods
You assume the outcome would be the same - I see no evidence to support that B
> A. Given that A is the incumbent business model and form, B would have to be
run for 5+ years to prove that there is anything there that can win
consistently and also scale to the needs of the institutional investor.

Indeed, if you are a new fund starting out and seeking institutional money and
are not coming from an established firm, you can expect to have to develop 3-5
years, minimum, of track record before anyone will generally invest in you.
Given that any trader on this platform might disappear overnight, I don't see
institutions rushing to put money into it.

~~~
kevinali1
Perhaps (just perhaps), Quantopian is gathering (or has gathered) the evidence
that B > A. If so, this is a great investment.

Regarding institutional money, they have been around for a few years. I'm not
sure about how long they've been running the competition, but they certainly
have been running an asset management service for some time - and would have
impeccable records regarding this.

In other words, there is a lot about Quantopian that we don't know and so it
would be difficult to make a judgement call on the quality of AH's investment.

~~~
inthewoods
My point is that I think it has a fundamental problem - if someone has a
successful algo, they take it off the platform. Institutional money would be
very leery (indeed, this isn't the first time this model has been tried).

So even if I'm confident in their overall model, based on, say, 5 years of
track record, I'd still be concerned over algos just disappearing. Also,
they've only been running their asset management business for a relatively
short time via the investment capital from Cohen's fund.

~~~
daveguy
I think when you submit an algorithm you give quantopian non exclusive rights
to use it indefinitely. Even if you stop participating the best algorithms
will still be used.

~~~
daveguy
Update: looking at the FAQs that applies to contest submissions only. They
state in the FAQ that all algorithms developed and evaluated on the site are
by default owned by the developer. Entering the contests give them license to
use.

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vikas5678
I worked with them for a little while. At a fundamental level, its a brilliant
model. They're basically looking for strategies that have little to no
correlation to the S & P. Also, any strategies that short the S & P market
successfully are welcomed. They already have enough of the trend following, or
mean reversion strategies which are found everywhere in quant trading books.

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tedmiston
Has anyone participated in one their programming contests? Just curious how
approachable they are to someone without experience on Wall Street.

~~~
laxatives
Their contests evaluate your algo on a number of heuristics, namely high alpha
and zero beta. They are agnostic to you or your background.

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Ftuuky
Is Quantopian a good idea for an entry-level quant-wannabe?

~~~
bachback
no, its nowhere near professional level. for that you'd need clean price data,
which is a business in itself.

~~~
xapata
Clean price data is one of Quantopian's features. They've put effort into
normalizing price data for backtesting. For example, they deal with stock
splits for you, so that you don't accidentally treat an 10-way split as a 90%
loss.

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wsmith
_Quantopian will bill you immediately for the first month 's subscription._

How much does a month's premium data subscription cost?

~~~
joshuapayne
Each premium data set is priced differently. Prices are set by the data
vendor, ranging from totally free to $150/month. Most are in the $5 -
$50/month range. (I work at Quantopian).

