Where are the bodies?

A

alex314159

This is shaping to be one of the worst years ever for the investment community. I read a stat that 80% of dollar assets are down ytd which is the most on record (eg total reach not scale of losses). Dominoes have fallen month after month - crypto, vix, gold, EM, tech, oil...

Yet - no big fund / player has blown up. Plenty of guys down 10% but they’re still in the game. Was no large investor long Nasdaq with 2x leverage? Is the market that efficient? (And don’t tell me about optionsellers.com that’s a mere $150m of retail money.)

I feel it’s hard to call a bottom without a cathartic event, and that often is a large investor going out of business.
 
There have blow ups and job loses. I think you only read about the famous or infamous ones.
Had some friends with a short vol. fund and they no more Englander closed his quant fund, but you only hear about the big ones like Optionsellers.
 
alex314159 said:
This is shaping to be one of the worst years ever for the investment community. I read a stat that 80% of dollar assets are down ytd which is the most on record (eg total reach not scale of losses). Dominoes have fallen month after month - crypto, vix, gold, EM, tech, oil...

Yet - no big fund / player has blown up. Plenty of guys down 10% but they’re still in the game. Was no large investor long Nasdaq with 2x leverage? Is the market that efficient? (And don’t tell me about optionsellers.com that’s a mere $150m of retail money.)

I feel it’s hard to call a bottom without a cathartic event, and that often is a large investor going out of business.
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The drop is not that big yet. If you look at the stock market, just 1-2% each day and then coming back up a bit. Wait until you have those double-digit drops in one day, then you will see the bodies. And besides we already saw the wiping out of 290 retail accounts in natural gas futures options and the closing of quite a few hedge funds. So it's coming, very slowly. And Feds is intending to burst the bubble slowly this time, as slow as it can, letting the gas out, tiny litte bit at a time.
 
ajacobson said:
Englander closed his quant fund
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I assume you are talking about the Prediction Company? From what I heard first-hand, it had little to do with performance, but I can't disclose the exact story unfortunately.
 
sle said:
I assume you are talking about the Prediction Company? From what I heard first-hand, it had little to do with performance, but I can't disclose the exact story unfortunately.
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There was bloomberg article about them. Basically, the fund closed because returns were declining because the trades became crowded as the strategy caught on. Closure was not closed by losses or blow-up like optionsellers. Investors in the fund made money and had a good ride.
https://www.bloomberg.com/news/arti...ed-mexican-border-and-authorized-lethal-force

Izzy Englander’s Millennium shuttered Prediction, a statistical arbitrage fund, at a time when that strategy within the industry is struggling to make money. Returns for the approach are down less than 1 percent so far this year, according to a Scientific Investments index of 160 funds, marking its first year-to-date loss since 2010. While Prediction outperformed the average stat-arb fund, that wasn’t enough to keep it running, the person said.

But the novelty of their stat-arb strategy began to fade in the years leading up to the financial crisis and today there are hundreds of rivals vying for the same profits from pricing disparities in correlated securities, hurting returns.

When it closed, Prediction managed less than $350 million. The small number of employees who left are looking for a new partner.
 
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