Fading your own model?

[allin1]

Why couldn't a single person or small group have access to inside information?

I imagined it to be much, much harder for a single guy to do what a group can achieve because there is a lot of work to do, but as you say it is probably not impossible.

[rsigley]

Sounds like this model was 'predictably wrong'. And I believe in forum posts you have mentioned that in your career you have built many failing models.

probably because he uses traditional univariate statistic methods to model complex events

[mathdotcom]

probably because he uses traditional univariate statistic methods to model complex events

No he uses multivariate methods, but questionably so

[rsigley]

his book was

input data -> traditional linear regression to directly predict one variable (univariate) in excel -> faulty inferences

so was the book a lie? i assume the book was just a disguised commercial for BetUS, but was the book advance from BetUS so much a book of lies was also put out?

[evo34]

Not following. What information can larger groups include that a small group or even a single person cannot?

How is group size positively correlated to the information available to them?

Why do you think hedge funds employ more than one person?

[MonkeyF0cker]

Why do you think hedge funds employ more than one person?

What hedge fund uses large TEAMS of analysts? Name one.

[allin1]

what hedge fund uses large teams of analysts? Name one.

pimco has quite a few, but I don't know why are you asking about "large teams". why the extreme? though I would say that one analyst would be more extreme for any big hedge fund. of course there are individuals that make a good living in financial markets swimming with the big fish but they are sharks compared to the whales that are hedge funds.

I don't think there is one operation with just one guy that is doing everything, that can compare itself to the big ones in term of capital when it comes to hedge funds.

later edit: btw one of the pimco founders started out with 200$ at blackjack in vegas making it 10k, after reading that famous book J7 was talking about. Then he got in the financial markets and now runs one of the biggest hedge funds in the world.

[MonkeyF0cker]

pimco has quite a few, but I don't know why are you asking about "large teams". why the extreme? though I would say that one analyst would be more extreme for any big hedge fund. of course there are individuals that make a good living in financial markets swimming with the big fish but they are sharks compared to the whales that are hedge funds.

I don't think there is one operation with just one guy that is doing everything, that can compare itself to the big ones in term of capital when it comes to hedge funds.

later edit: btw one of the pimco founders started out with 200$ at blackjack in vegas making it 10k, after reading that famous book J7 was talking about. Then he got in the financial markets and now runs one of the biggest hedge funds in the world.

I'm asking about "large teams" because that's the term that was used by Justin. I'm not talking about the size of the entire firm. Obviously, if you're employing profitable analysts and paying much less than (or even anything approaching) 50% commission, the firm is going to grow in capitalization, but we're not talking about a situation of an upward flow of capital. I'm talking about the size of the teams of analysts that work together with a specific haircut. There are plenty of firms where traders work almost exclusively individually. Third Millenium and other derivative firms in Chicago often have traders with individual haircuts while larger firms like Peak6 typically employ teams of a handful of analysts.

P.S. - Anyone who runs $200 into $10k in blackjack (whether card-counting or not) had a very high degree of luck involved. The spreads alone could kill a $200 bankroll within minutes.

[evo34]

What hedge fund uses large TEAMS of analysts? Name one.

Renaissance. Where the fukk have you been living?

[MonkeyF0cker]

Renaissance. Where the fukk have you been living?

Really? How many traders oversee their NOVA fund?

Where have I been living? LOL.

[mathdotcom]

Don't talk about the markets with Monkey, he knows everything that goes on at the CBOT.

(He is also well known for leaving town for Vegas before paying up his sizable tab at Ceres Cafe)

[allin1]

Yes, there are a lot of traders that work almost exclusively individually for banks, funds and other companies. (You know this world very well do you come from such a background or are you still involved inthe financial world?)

Regarding the size of the teams of analysts I don't know what to say. I am imagining that it doesn't matter how many they are. If a large percentage of them agree with one opinion/decision then you have more confidence in it. If it's 50%-50%, less confidence. I am imagining the same scenario being possible with a group of sharps, but I could be wrong because I am not sharp

Btw J7 mentioned that in order for the team to be good each one has to be able to make money on their own...

Regarding the bj thing I thought it was a little bit of luck too, but from 10k to billions in financial markets is quite an achievement.

[MonkeyF0cker]

Yes, there are a lot of traders that work almost exclusively individually for banks, funds and other companies. (You know this world very well do you come from such a background or are you still involved inthe financial world?)

Regarding the size of the teams of analysts I don't know what to say. I am imagining that it doesn't matter how many they are. If a large percentage of them agree with one opinion/decision then you have more confidence in it. If it's 50%-50%, less confidence. I am imagining the same scenario being possible with a group of sharps, but I could be wrong because I am not sharp

Btw J7 mentioned that in order for the team to be good each one has to be able to make money on their own...

Regarding the bj thing I thought it was a little bit of luck too, but from 10k to billions in financial markets is quite an achievement.

The biggest differences in the financial world are access to a seat on the floor, access to margin and a clearing house, a vastly greater amount of data collection, and a far greater haircut than a great majority of people would have access to otherwise. There are plenty of successful traders that go off on their own to start their own firm once they've acquired enough capital - namely so they keep their entire split.

[cutchemist42]

j7 wrote a book?

[allin1]

j7 wrote a book?

conquering risk

[LT Profits]

j7 wrote a book?

Justin7 = Elihu D. Feustel http://store.sbrforum.com/products/300-CONQUERING-RISK

[evo34]

Really? How many traders oversee their NOVA fund?

Where have I been living? LOL.

I'm glad you can use Google. Renaissance's wikipedia page says something eerily similar to your comment" "The Nova Fund has traded NASDAQ stocks only, executing purely electronically, with a desk staffed by 1-2 traders overseeing operations." Overseeing operations is not exactly the brains of a hedge fund. But I'm sure you would know that already.

Remind me of your trading experience again?

[MonkeyF0cker]

I'm glad you can use Google. Renaissance's wikipedia page says something eerily similar to your comment" "The Nova Fund has traded NASDAQ stocks only, executing purely electronically, with a desk staffed by 1-2 traders overseeing operations." Overseeing operations is not exactly the brains of a hedge fund. But I'm sure you would know that already.

Remind me of your trading experience again?

Right after you post your resume.

Since you seem to think you know so much about Renaissance, how many people developed the NOVA fund with Robert Frey exactly?

[339955]

Using a "fudge factor" takes a very naive view of regression analysis, and I've said this before, you should really take a course on what's going on in the background. If you're consistently predicting higher than normal totals, you can't just subtract x from the predicted values and call it a day. It means that at least one of your co-efficients is too high (other than the constant), which means your model is overestimating the marginal effect of a certain variable, probably because you have omitted something seriously relevant. If the underlined part of that statement doesn't bother you, then, well, carry on...

good explanation that is helpful for me thanks.

off topic question, what models do you use for MLB what stuff do you model yourself there to bet?