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The market cannot be beat by 100% of amateurs piddling away on their brokerage account during a few spare hours a week.

The market cannot be beat by 99.9% of professional investors spending all their time day and night trying and with a team of people helping them.

I'm calling your bluff on you being an econ PhD student or maybe you have been one for a month or two at most...? If you are an econ grad student you know what RenTec is doing more or less. At least in theory if not specifics, people talk and there's plenty of econ papers explaining what's underneath major quant strategies.

People need to chill bringing up RenTec when finance comes up (Buffett too). Just like they need to chill bringing up Facebook when talking about startup valuations. Outliers are outliers.




Academia doesn't pay that much attention to the real world. Most of the papers out there are rubbish and would be considered junior level work, except with way too much detail.

There are pretty much no econ papers that would describe what happens inside the high end systematic firms. (Source: I work in the industry)

Bringing up the outliers is a perfect counterexample when wild sweeping statements are made. These are not even real outliers, they are valid samples.

>The market cannot be beat by 99.9% of professional investors spending all their time day and night trying and with a team of people helping them.

Professional investors pretty consistently beat the market. But not the ones that you see. The louder someone markets their fund, the more likely it is to be a scam. Your sample is of guys who heavily promote their fund and make money from management fees not performance.

The best managers aren't even made visible to you. Why would you attract attention to what you're doing if you have a good thing going?


I agree & the "pro-index" crowd would improve the accuracy, if not the effectiveness, of its message by saying "non-passive strategies can work superbly, but not for outsiders with <$1M in capital" instead of saying "no one beats the market in the long run" / "you can't predict which parties will beat the market in the long run".


>high end systematic firms

I'm not familiar with this term, would you mind giving me a general description of what kind of investing these firms take part in?


"Algotrading" generally refers to execution algorithms only, despite popular culture's interpretation.

When the funds portfolio is decided based on a system your fund is systematic. It's an important distinction.


Illuminati confirmed then right. My bad.

Professional investors are not pretty consistently beating the market...secular! Anyone can have a good year or two.

I'm not talking about dudes talking their book on CNBC. Yes there are shops that beat the market, but if you have beaten the market 5 years in a row, you can't keep it a secret even if you want to.


How exactly do you think the performance is made public, if the fund doesn't want it to be? This isn't about illuminati, this is just logic. You can't hide what you're doing from the institutions you have to deal with, but they won't exactly disclose it to general public.

Why would you promote your fund, if you have all the FUM you need? If you are doing well, why would you tell people about it? It is funny that your position is because you haven't seen it, it doesn't exist.


You say you work in the industry. How long have you been doing this and what do you do?

You don't have to answer but your questions are odd for someone with experience in the industry. But let's get into it:

How is performance made public? The same way people know what "stealth" startups are doing. Sometimes a document leaks and sometimes people talk. Usually both. Let's just say a manager is super secretive. Do you know how many people in the chain know performance anyway... Current and former employees. Current and former recruiters of these employees. Current and former clients. Current and former consultants to those clients. etc... And you're saying all these people also don't have that human urge to brag about these rock stars of the investment world? OK.

Even if that were the case, everyone has a cousin at State Street or HSBC, these people take coffee breaks and love to gossip performance and secrets breakdown there.

This is like Fermi's paradox. If all these funds out there are beating the market, then where the hell are they??

All of the funds beating the market are secretive and successfully secretive? For decades?

If it was as common as you imply there should be more of them known to the public by choice or by accident. That is logic.

Don't be the guy who mortgages his house to buy Herbalife products and tells his wife this is your year.

The comment above said 99.9% are not beating the market. There are thousands of funds out there. All funds are filing Form ADV's now...We know who exists. So yes there's a few people who do beat the market. Those 3 Russian guys in Texas and that story about the MIT PhD's working out of a house outside Miami and so yes, there's a few examples out there. Dinky family offices don't count. But no, there's a not a bunch of professional investors with serious weight under management and outside clients beating the market over a secular horizon.

There's a handful, and if you are at one of them congrats to you. But to come on a forum saying there's a bunch of professional investors beating the market, they just all happen to super secretive billionaires and they don't tell anyone about it. That's misleading. That's tech back office got your info from a e-book kinda talk. And it would be at odds with your original thesis that folks that beat the market are secretive and don't talk. So it makes me think you don't work at one, you just want to believe they exist. But again if you do work at one, congrats. Are you hiring? DM me.

So where are they?

https://en.wikipedia.org/wiki/Fermi_paradox




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