Sadly, most of the history of hedge funds it would seem relates to winning in 'zero sum games'.
i.e. a waste of human potential.
Obviously there are side benefits: market liquidity, rational pricing, 'market making' for specific activities, the ability to allocate resources in more exotic ways etc. but by enlarge it doesn't look good.
It'd be nice to see more opportunity in growing the pie rather than fighting for the same pieces.
We talk about it a lot in the office and I definitely agree with you. Perhaps I'm naive, but I don't think it needs to be the case though. I sort of touched on it at the end of this [1] but it's something I want to dig deeper into.
We really feel there's a lot of power to use the profit making incentive that drives these firms to generate real-world value, and that the main driver of that has to be tying trading decisions more closely to true human value by giving the industry better real-world information (and potentially sensible regulation).
Hopefully, we can help in some small way, but I think we still need to do a lot of work to understand the incentive mechanisms of the industry better.
If you want to subscribe I'll leave a note and let you know particularly when something on that topic comes up.
Comments
Sadly, most of the history of hedge funds it would seem relates to winning in 'zero sum games'.
i.e. a waste of human potential.
Obviously there are side benefits: market liquidity, rational pricing, 'market making' for specific activities, the ability to allocate resources in more exotic ways etc. but by enlarge it doesn't look good.
It'd be nice to see more opportunity in growing the pie rather than fighting for the same pieces.
We talk about it a lot in the office and I definitely agree with you. Perhaps I'm naive, but I don't think it needs to be the case though. I sort of touched on it at the end of this [1] but it's something I want to dig deeper into.
We really feel there's a lot of power to use the profit making incentive that drives these firms to generate real-world value, and that the main driver of that has to be tying trading decisions more closely to true human value by giving the industry better real-world information (and potentially sensible regulation).
Hopefully, we can help in some small way, but I think we still need to do a lot of work to understand the incentive mechanisms of the industry better.
If you want to subscribe I'll leave a note and let you know particularly when something on that topic comes up.
[1] http://www.krzana.com/blog/the-future-of-financial-analysis