Quant funds
As a result of some of the disastrous hedge fund performance from the last few weeks, we’re starting to hear whispers about whether quantitative strategies are really viable or not. If you don’t know what a quant fund is, this about sums it up:
“The models replace instinct. They try to turn historical trends into predictive science, using elegant mathematics seemingly above the comprehension of your average 401(k) participant or Wall Street fund manager.”
The kind of people these quant based hedge funds hire to develop these models:
“Instead of veteran, market-savvy traders waving fistfuls of sell slips, the elite quant funds employ Nobel nerds with math PhDs, often divorced from the real world. It’s not for nothing that they are called “black-box” funds — opaque to outsiders, the boxes contain investment magic understood by only the wizards who conjured it up.”
Must be a tough time to a be a quantitative analyst! More here.