zlacker

>>mkeete+(OP)
What's funny about this is that I can recall discussions here and elsewhere from only a few months ago questioning the "guaranteed" super-high returns. I forget who said this but someone awhile ago said in finance said that if someone is promising you consistent above-market returns it's either a scam or there is unknown or undisclosed risk.

And the Crypto Andys were all like "you just don't understand DeFi!" to which the retort is "No, you just don't understand finance".

Finance is the way it is for many reasons. There are thousands of years of lessons that have made the system the way it is. I get the innovator mentality of sweeping away the old but there seems to be a fine line between innovation and ignorance.

I'm just sitting on the sidelines watching people relearn all the lessons of finance the hard way, some because they think they understand finance because because they understand merkle trees and consensus protocols but really most just want to get rich quick.

>>jmyeet+hg
What most people don't understand about finance is that there are fundamental rules that you really cannot break without consequences.

Anyone who has studied quantitative finance knows that it is a HARD science. I worked with a Nobel prize winner in economics, and the math dominated. There was no politics, no opinions, no ethics involved. It really is a science.

Most social media characterize finance as some ethical vice or organized political power structure - and those people simply don't understand finance.

Talking to people who are looking to just tear down modern finance are no different than climate change deniers, antivax, or flat earthers... and yes, they even exist in crypto (and on HN).

>>koheri+Aj
Will understanding the math make me rich? :)

>>monkey+ul
Work at a HFT firm in Amsterdam. That type of finance knowledge will make you rich.

>>mettam+Tm
So you can guarantee 20% returns? We're back where started.

>>djenen+6z
look - there are companies out there - Renaissance for one - who do make very good returns consistently. The difference is that not all returns are infinite. in fact, most good investments are finite - the market eventually catches on and then prices equilibrate. saying that there are no guaranteed 20% returns does not mean that with hard work and good strategy there are not 20% returns to be made on some arbitrary amount of principal at any given time.

put another way, its easy to earn 20% on a dollar. its hard to earn 20% on a billion dollars.

>>abakke+rO
What the fuck are you talking about? The Renaissance medallion fund isn't open to the public and is no longer generating double digit returns as of 2020 or 2021. Much of their performance can be attributed to the fact that they just didn't pay their taxes. A $6.8 billion fine just doesn't cut it in the face how much money they were making. The Medallion fund saw $11 billion in net outflows due to low returns in 2021. Their funds that are open to the public regularly offer negative and low single digit returns annually. Please do tell us more about how efficient this market.

https://www.pionline.com/hedge-funds/renaissance-technologie...

>>former+zL1
I was talking about the topic at hand: the possibility of consistent good rate of return. You are right - medallion has had some hard times recently. But, prior to that, it generated very good returns for a while.

You are not addressing the substance of my comment, namely that many investments are finite, and this is why infinite riskless investments don't work.

>>abakke+II6
> You are not addressing the substance of my comment, namely that many investments are finite, and this is why infinite riskless investments don't work.

I agree that "infinite riskless investments don't work" and agree with the "possibility of consistent good rate of return." Many investments are indeed finite on a human scale. An investor will almost always want their money back with some return, no? At some point they'll take their money out of the investment or market and spend it. The particular issue was the claim that the Medallion Fund from Renaissance Technologies was a good example for a consistent rate of return. They may have done that but how would we know? Their data is self reported, and as far as I'm aware there's no publically available audits of their performance. Even if there were, we have evidence of their cheating at taxes through abuse of options. If I were you, I would take their claims with a very large lump of salt. Do you know who else claimed guaranteed double digit rates of return? Bernie Madoff. We might not have found out about his fraud either if it weren't for some whistleblowing and for his admission of wrongdoing.

The Medallion Fund may have returned 30-70% over decades. Do we really know for sure? I think you'd have been better off simply suggesting index funds for consistent returns for the average person or citing Warren Buffett or Bill Gross for generating alpha/consistent returns.