The Madoff documentary on Netflix versus the returns of The Medallion Fund

[Businessman]

Keep you hair on, i obviously meant what he was claiming to pull out ever year. I don't know what the exact number was. But i doubt it was 7Billion a year like Medallion do.

I used the term 'claimed' twice in my last post, i forget to use it a third time.

 

[destriero]

lol it was fiction so obviously there are no capacity or microstructure issues. Are you well?

 

[murray t turtle]

they understood the tax code. They only got caught because of an audit.

all tax avoidance is about definitions, classifications, and technicalities.

%%
Good points on understanding the tax code, CPA ...........................
''ALL tax avoidance is about definitions'' maybe a grain of truth there;
But tax jurisdictions+ boundaries make make a big difference. To the 7 states that pay no state income tax its is about much more than a definition.
Strangely J Simmons paid a lot of tax on cigs, who would have figured that??

 

[mason macgregorson]

Jim Simons is the person within the financial industry that I respect the most.

In the Madoff documentary it is stated multiple times that the returns Madoff delivered were impossible to achieve in the real world. A whistle blower notified the SEC as early as around 2001 and actively pointed to a ponzi scheme as a plausible explanation because he believed the returns were impossible to achieve.

But isn't the returns of the The Medallion Fund much more impressive both in terms size and stability?

(I of course do not suggest The Medallion Fund is a ponzi. It is only open for employees and their families. That fact alone rules out a ponzi.)

I read aver 61% per year since year 1.

 

[newwurldmn]

RenTech is the biggest institutional-seller of vol on the planet.

I this theory that rentech has many very simple models that are uncorrelated and they just go nuts on the leverage and let the central limit theorem work.

Like platt is probably doing now too.

 

[Nobert]

I guess the whistle blower must have had access to

It is fascinating that throughout all of those years, not even a single one ,,fair" person among his team, spoke about it.

• Maybe they had no access to those records
• Maybe they were paid so-well, to stay silent
• Maybe Madoff had an extreme communication skills in his speech, a way of corrupting them/changing their perspectives and morals

,,Example"

 

[EllisWyatt]

...they just go nuts on the leverage ...

JS christened his vessel, Archimedes:

“Give me somewhere [firm] to stand and [with a lever] I will move the earth.”

—Archimedes in Pappus of Alexandria Collection (Book VIII, p. 1060)
https://books.google.com/books?id=FSlOCc_QjiIC&dq=Pappus collectionis&pg=PA985

 

[Businessman]

Yes, they fluctuate more, but no negative return years and overall much more impressive than Madoff's track record.

https://www.cornell-capital.com/blog/2020/02/medallion-fund-the-ultimate-counterexample.html

"According to Robert Mercer, one of Medallion’s key investment managers, Medallion was right on only about 50.75% of its trades"

This could well be disinformation.

But taking it at face value, it is missing the average win vs average loss ratio.

Lets assume it is 1:1.

If you have a win rate of 50.75% after all transaction costs, and a 1:1 win/loss size ratio, then by my calculations you need to do about 600 trades a week to have medallion like returns.

If the win/loss ratio is slightly better say 1.1:1 (and same 50.75% win rate). Then you need to make just 30 trades per week to get Medallion like returns.

With 1.2:1, only about 12 trades per week are needed.

 

[Nobert]

about 600 a week

https://www.elitetrader.com/et/threads/atnx-squeeze-coming.365448/

Part of those 600. A pattern, whenever they were one of the major holders, in a small/micro-caps.
650k equities globally. Multiple markets.

 

[destriero]

I can't sit through it, but I've watched the De Niro movie a couple of times. The close ups of the Madoff character is absurd. Does nothing for the documentary.