To marxist:re: "How do hedge funds add value to production,
that is, how do hedge funds contribute to the SOCIAL surplus? "Hedge funds, long-only funds, and other investors help set the correct price
for capital in the market. In the short-run, markets are greedy and fearful,
and mis-pricings occur. When LO and HF investors see these mis-pricings, they
collectively take counter-trend positions which helps drive capital allocation
to the most efficient businesses. This is one of the main reasons
why centrally planned economies fail to keep up with market driven economies;
capital is not efficiently allocated to the best users of capital. Centralized
decision makers often get far behind in their awareness of new products or
services demanded by the market, cling to older and less efficient production
and distribution systems, fail to recognize the benefits of new materials and
technologies, and fail to reward entrepreneurs and business models that are
taking advantage of new approaches and are meeting emerging demand for new
products and services.Progress is driven by allocating marginal
capital to often overlooked business models. We all win when this happens.
@NoNamesAccepted "@marxist: "I understand very little, "The most accurate words ever written by a Marxist."I knew
someone who knows no Marxian economics would pounce on my statement. I meant
that I know little about how a hedge fund functions, that is, how much it relies
on algorithms vs relying on hunch and insider knowledge. But, anyway, glad to
make your day.Niall Ferguson in his various editions of "Ascent
of Money" treats hedge funds, but not adequately. His videos are a good
place to start however, and can be streamed on Youtube. He talks about Mereton
and Scholes too. Enjoy.
@JImInSLC "Front running the market with HFT does not help society, only
helps the rich get richer."I strongly suspect this. How do
hedge funds add value to production, that is, how do hedge funds contribute to
the SOCIAL surplus? BTW, anyone else remember the hedge fund kings
Mereton and Scholes? They devised a "fool proof" algorithm guaranteeing
their fund's profits forever, but it was not quite forever. Their fund
crashed. Did they give back their Nobel Prizes in economics? Should have.Ms Cortez should return to her subject and get more information.
I'd like to know more.
@marxist: "I understand very little, "The most accurate
words ever written by a Marxist.As Reagan said, there are those who
support Marxism and there are those who understand Marxism. But nobody who
really understands Marxism supports Marxism.I notice that the North
Korean army is starving to death. I remember the bread limes of cold war Soviet
Union. We read frequently of the dire situation in Venezuela. Cuba languishes
in poverty.Meanwhile, refugees who moved to the USA 20 years ago are
now getting wealthy and enjoying the fruits of capitalism.Marxism is
failed and will always fail.
Congrats to her, as someone who used to work in her world, it is very tough to
consistently win. The market constantly changes in response to winning
strategies, so you have to constantly change your algorithms. And, if you
don't predict correctly, you lose.My firm did very well and
grew tremendously on strategies that averaged about 60% correct.This
is something retail investors can't do for themselves. It requires
co-located servers, continuous software updates and prescient strategists. And
now, I would add machine learning.
Impressive intelligent young woman. Hope that she can do something good with
what she has accomplished. Front running the market with HFT does not help
society, only helps the rich get richer.
As a fellow Utahan, this story makes me feel proud and happy to know that our
public schools can propel students to great success — but not against some
odds. If we remember, several years ago the State Legislature took
up great “concern” about the Internatioanl Baccalaureate program, an
assault on the program led by Sen. Margaret Dayton. Now the proof is in the
pudding, and I’m so happy that one of Utah’s newest stars credits
the IB program specifically as part of her success. Cheers to Ms. Qi and her
Great example of how opportunity in capitalist countries allows those on the
lowest rungs to move to a better place. Education, hard work, a
"failure-is-not-an-option" mentality and more hard work are the recipe.
Sadly, the socialists and liberals convince too many that they are victims of
the system, killing hope and motivation, and giving an excuse to check-out and
not even try.Well done Ms Qi.
Ms Cortez, I wish you had asked Ms Qi something about how her hedge fund works.
This was an opportunity to share some insider information with those of us on
the very outside. As I understand it, and I understand very little, hedge funds
manage risk and earn healthy returns for doing so.