Even the Medallion Fund only averages 20-40% gains a year and they've stacked the deck with every possible advantage of resources and the most brilliant folks they can find. If the risk management on this is geared to the point where it's seeing 300% account volatility in a month, even in a positive direction, it's easier assign higher likelihood to
"this algo is levered far higher than it ought to be and while you've dodged landmines this month, you won't in the long run,"
vs.
"your 'minimum viable stat arb' and competent implementation outperforms the best-of-the-best outlier."
I think skepticism is warranted as most people at this point end up blowing up, but hey, I guess there's some slim possibility that it's the latter?
>Even the Medallion Fund only averages 20-40% gains a year and they've stacked the deck with every possible advantage of resources and the most brilliant folks they can find.
The Medallion Fund is also larger than a single quant's trading portfolio. This is important because a given trading strategy loses its effectiveness (in percentage terms) when scaled up. A strategy that yields 100% return on a 10k investment is unlikely to return 100% on a $10M investment, for instance.
"this algo is levered far higher than it ought to be and while you've dodged landmines this month, you won't in the long run,"
vs.
"your 'minimum viable stat arb' and competent implementation outperforms the best-of-the-best outlier."
I think skepticism is warranted as most people at this point end up blowing up, but hey, I guess there's some slim possibility that it's the latter?