The Mathematician who Cracked Wall Street

[dtrader98]

I'd like some elaboration here as well if we are to take any of this post seriously.

http://www.institutionalinvestorsal...he-Secret-To-Medallions-Returns-Leverage.html

 

[ktm]

http://www.institutionalinvestorsal...he-Secret-To-Medallions-Returns-Leverage.html

Where's the part about "none of it being true" and all of the illegal stuff?

 

[Bry]

Great vid. That guy is the real deal.

 

[marketsurfer]

The fact that he's running so much leverage is testament to the quality of his strategies. If he's running so much leverage, a 1% loss on the book (which is not unreasonable for most strategies) would be a 15% loss on equity. Yet he's never had a down year for like 30 years.

If he is in fact running an unregulated broker dealer, that's testament to his cleverness. Trading isn't just about calling the direction of stocks. It's about building a platform with real edge. He has done that by building this "unregulated broker dealer" which gives him access to leverage and access to superior execution.

Extremely well stated. Bravo! surf

 

[marketsurfer]

None of this is true. It's well documented that Rentech violated leverage limits. It was running at 15x leverage when hedge funds are limited to, at most, 6x leverage. Rentech in effect was running an unregulated broker dealer fronted by the legitimate broker dealers. If Simons had some special sauce, he wouldn't need massive and illegal levels of leverage.

Where do you get this strange information??

 

[marketsurfer]

If what you tell is true, then the performance is more like a joke.
70% with leverage 6 means only 11.66% without leverage.
70% with leverage 15 means only 4.66% without leverage.



Hedge Funds, Leverage, and the Lessons of

Long-Term Capital Management

Report of

The President's Working Group on Financial Markets

April 1999

Hedge funds are limited in their use of leverage only by the willingness of their creditors and counterparties to provide such leverage.

Lol. Do u have any idea what it is like to manage large sums of capital?

 

[NoVoodooHere]

Mathematics whiz-bang & high leverage, where have I heard that before? Oh w/ LTCM it was not so much leverage as taking preposterous tail risk.

Surely, it's different this time

 

[i am nobody]

Lol. Do u have any idea what it is like to manage large sums of capital?

I know you have, at least about how to lose it.

 

[fhl]

http://www.institutionalinvestorsal...he-Secret-To-Medallions-Returns-Leverage.html

Low vol and leverage.
And so did Buffett:
------

The secrets of Buffett's success | The Economist
www.economist.com/node/21563735The Economist
Sep 29, 2012 - These two factors—the low-beta nature of the portfolio and leverage—pretty much explain all of Mr Buffett's superior returns, the authors find.
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A couple of billionaires had this good idea a few decades ago and it paid off. Is there still life in this method or is it played out?

 

[lawrence-lugar]

Low vol and leverage.
And so did Buffett:
------

The secrets of Buffett's success | The Economist
www.economist.com/node/21563735The Economist
Sep 29, 2012 - These two factors—the low-beta nature of the portfolio and leverage—pretty much explain all of Mr Buffett's superior returns, the authors find.
-----------

Low volatility and Leverage seems like an oxymoron
it's the way Buffett bought and structured his deals...that made him rich and richer. ..it was almost impossible for him to lose.