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Sunday, January 24, 2010

Slippery Simons' latest twist on legalese

You can read about Slippery Simons screwing investors with his cadre of astrophysicists here last year, or you can read how he screwed investors the year before here, or you can read how he screws investors now, today, in his fine print disclosure.

What the model doesn't indicate is why Medallion gets the good trades, and Renaissance gets the bad trades!

Oh that's right--James Simons learned that technique from Goldman Sachs.

btw-what happened to Goldman's Global Equity Opportunity Fund--that $6 billion dollar fund, that invested on global equities, when most bourses went up 80%?

Oh that's right. It's closed. With AUM of $200 million.

NEW YORK (Dow Jones)--Goldman Sachs Group Inc. (GS) has closed its Global Equity Opportunities hedge fund, a company spokeswoman confirmed.

The fund, which was one of several computer-driven quantitative hedge funds hit hard in early August 2007, had about $200 million when Goldman shut it, from a peak of more than $6 billion.

After losing 23% during August 2007 alone, Goldman and investors injected $2 billion into the fund. It wound up being down 33% for that year, and never again came close to its peak assets. While the fund showed modestly positive performance during the first half of 2008, investors continued to withdraw their money and Goldman decided to close it.

Why is it that Goldman's proprietary trading for their own account is so profitable, but they screw investors in their funds?

Maybe Goldman is just trading as a "principal" like Slippery Simons does in REIF vs. Medallion.

But they sure dress up the screw job with models and algorithms!

And like Goldman, Slippery Simons will tell you the fine print doesn't mean anything!

USE OF MATHEMATICAL MODELS BY RIEF AND MEDALLION FUNDS The Medallion Funds and RIEF both use mathematical models to trade. Although these models employ some of the same or similar signals, they are used very differently in each model and produce dissimilar results. Medallion has a much shorter time horizon for its predictive signals, has a much shorter holding period for its positions and trades in a more diversified universe than RIEF, which helps to reduce the impact between the two systems. Renaissance has periodic checks to attempt to ensure that the impact of each system’s trading is not materially adverse to the other. However, no assurance can be given that the trading of the Medallion Funds will not have a negative effect on the trading of RIEF.

1 comment :

Anonymous said...

So basically he used his private fund to bet against the investor based fund? How did he even manage to get away with it? You'll think someone who makes over $250k/year is somewhat smart and will avoid these scams when they see it...