Another computer driven hedge fund closes

Great, but now change the word "CTA" with "all trading", and replace the word "futures" with "any". Then the picture becomes perfectly clear.

 

They don't know what other excuse to give. They can't say the dog ate my returns

Agreed.

 

Nope. That obviously never helps, but it's not the real reason.

More players have left the space in the last five years than ever before and it's still not profitable so we have a controlled environment to clearly observe and ascertain that that cannot be the reason.

 

Although it's a great reason and I agree a lot, the (CTA performance) decay has been going on for much more than 5 years. Correlation across markets has been increasingly rising and there was a good book I was reading about it some time back:
http://www.amazon.com/Systemic-Liqu...361333&sr=8-1&keywords=risk+on+risk+off+wiley

I think some of the long term decay is a combination of correlation increasing and too many jumping on the same edge bandwagons. I think CTAs (as a whole) need to adapt and diversify beyond the simple trend following models to prosper; as I don't really know if these models will 'come back' to consistent very profitable levels.

 

If we have Harvard grads in the Country working at McDonalds for minimum wage do you think the solution is that they need to be smarter and work harder to find a good job, or do you think maybe the fault and the solution doesn't lie with them?

OK, I'm outta ET for a while. Too much BS on here.

 

Interesting fine. I am interested in seeing the flash crash. I remember junk bond etfs blowing out because of Greece. That was the heads up.

 

What resources are required to continue fighting?

 

It will reorganize as the Dense Fund with a new highwater mark. :eek:

 

No ... you have to look at it on a percentage basis. Back in the day, if 20% of the market was computer driven, it's a lot easier to retain an edge. Now, if 60-80% are these types of algorithms, it's not so easy.

I think dealmaker is right, too many squirrels going after the same nut.

 

Trying to trade too many markets with a trend-following system can lead to failure because of capital constraints. Trend following works only when you have a good idea where the trends are going to develop. Sounds to me like good salesmen with large accounts but no experience with trading. Not every fund with a fancy name has experience.