Buffett wins $1M decade-old bet that the S&P500 would outperform hedgefunds

Re:Buffett wins $1M decade-old bet that the S&P500 would out... by osrec on Sunday September 17, 2017 @04:57PM (#15271650)

Yes, Renaissance is an exception. I would argue that their nature of their strategies almost puts them into a pseudo market maker category (I've personally never worked with/for them, but I hear much of their strategy is statistical arbitrage, made possible by favourable transaction fee set ups and fast, colocated execution infrastructure).

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Re:Buffett wins $1M decade-old bet that the S&P500 would out... by cma on Sunday September 17, 2017 @06:06PM (#15271950)

Plus apparently some dodgy "creative" tax code interpretations around short-term/long-term gains.

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Re:Buffett wins $1M decade-old bet that the S&P500 would out... by cheez on Sunday September 17, 2017 @06:24PM (#15272032)

Is it dodgy? You buy a share in a fund, that fund buys and sells, should you pay capital gains on every sale that fund makes? I don't think that has any precedent. You pay tax when you sell your share.

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Re:Buffett wins $1M decade-old bet that the S&P500 would out... by cma on Sunday September 17, 2017 @07:14PM (#15272234)

The type of strategy they employed isn't something small time investors could. It was a complex option scheme essentially buying options on their own short term trading.

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Re:Buffett wins $1M decade-old bet that the S&P500 would out... by dsacco on Monday September 18, 2017 @08:48AM (#15275349)

While what you're saying is true, in fairness there are two caveats:

1. Virtually all profitable strategies run by hedge funds are inaccessible to small time investors nearly by definition, because they have more capital and lower capacity constraints,

2. The partnership you're talking about with Deutsche Bank doesn't account for most of their returns, and was only in effect in the last decade, not decades before.

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Re:Buffett wins $1M decade-old bet that the S&P500 would out... by dredmorbius on Sunday September 17, 2017 @07:25PM (#15272270)

Any info on the colo'd infrastructure?

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Re:Buffett wins $1M decade-old bet that the S&P500 would out... by osrec on Monday September 18, 2017 @03:01AM (#15273886)

Unfortunately not, I'm afraid. I would guess they have much of their execution infrastructure in the same data centre as the exchanges they execute on.

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Re:Buffett wins $1M decade-old bet that the S&P500 would out... by dredmorbius on Monday September 18, 2017 @03:44AM (#15274047)

There's a considerable early period (1980s, 1990s) when Renaissance was turning up amazing profits when electronic trading largely didn't exist. That would suggest other methods.

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Re:Buffett wins $1M decade-old bet that the S&P500 would out... by osrec on Monday September 18, 2017 @07:03AM (#15274801)

Perhaps they were just market making back then as well? See this link: https://www.wallstreetoasis.com/forums/is-renaissance-techno...

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