This is a very weird use of terminology. None of Jane Street, Millennium or Citadel are High Frequency Traders (HFTs). Jane Street is a prop trading firm who engages in market making, but is not primarily known for HFT - they are grey box (i.e. human-in-the-loop) which on the spectrum of market making strategies, is pretty much the opposite end from HFTs. Other firms in this bracket include SIG and DRW.
Millennium and Citadel are both hedge funds, who do not engage in market making at all. They are most similar to other multi-strategy hedge funds like Balyasny or Point72.
You may be thinking of Citadel Securities, who are a market making firm and do engage in high frequency trading. Other large and well known HFT firms include Hudson River Trading, Tower Research, Jump Trading, Virtu, IMC and Optiver.
> The continuously updating global population counter is based on current aggregate birth and death rates (approximating values such as those from the U.S. Census Bureau International Database or UN DESA). The "live" births and deaths per second are statistically generated fluctuations around these averages to enhance the dynamic feel.
Ok, so you added high-frequency random noise to the estimated averages to make it feel more realistic. To me, this makes it feel less realistic.
Anyway, don't mean to gripe, this is a cool project!
Why do the estimated births/deaths per second counters have so much flicker? Surely you don't actually believe that the expected number of births/deaths per second fluctuates at 1dp precision multiple times per second?
The currency was USDC, which is a stablecoin pegged at $1 by Circle (www.circle.com) who are generally held to be reputable, so it very much was real money.
In the UK (where I am) the main ones are SIPPs and investment ISAs. In the US I believe people mainly use Roth IRAs (this is not any special secret advice, it is like the first thing your tax adviser will tell you).
No. Invest everything that you can now (into low cost diversified index funds or ETFs) and then top it up regularly as you get more capital from whatever else it is you do to earn a living (e.g. a percentage of your salary every month, a percentage of your annual bonus, a percentage of the annual dividend from your business etc etc).
The glib answer is that my own advice in 2022 wasn't available to me when I started my career in finance in 2010.
The less glib answer is that what I said above applies to managing your own money as a part time investor. If you are managing other people's money as well as your own, and doing it full time, with access to huge datasets and sophisticated models, then you are playing a totally different game.
I'm a professional investor (more than a decade of experience at hedge funds, particularly in global macro and quant, managing my own and other people's money).
Your central premise is flawed -- in particular
> Last 3 years has shown that to be a good investor you need to know macroeconomics
This is not true. It is true that 'macro' events (central bank actions, supply/demand shocks, wars, pandemics) affect prices, but it's not true that you need to be a macroeconomic expert to be a good investor:
1. Any understanding of macro you get from reading in your spare time is unlikely to be good enough to use as the basis for an investment strategy (although you may think it is -- but this will just lead to you making bad, or at best random, market timing decisions)
2. Even if you could become an expert, there isn't a clear mapping from macroeconomic outcomes to asset prices. So you not only need to be right about the macro picture, you need to be right about the effect it will have on asset prices (including the second- and third-order effects, e.g. central bank and other investor reactions to the macro outcomes)
3. Even if you do become a macro expert, and you have the correct mapping from macro outcomes to asset prices, it's not enough. You don't only need to be right about the macro outcomes, you need to be more right than the market. The market is made up of a huge number of diverse actors, many of whom have access to vast resources and spent literally all of their waking time trying to use macro data to predict asset prices. Are you better than them?
4. Even if the above can all be overcome -- is this really the highest return use of your time (compared to e.g. getting better at your day job and increasing your income, or starting a company in your area of expertise and getting rich that way)
That all sounds daunting, but fortunately there's a solution! Simply buy a diversified set of investments in a tax-efficient wrapper for a total cost of < 10 basis points annually, and add capital to the pot regularly, and you will get great investment results over any 25-30 year time horizon, with essentially zero effort.
I’m a hedge fund manager. Not a big fund all things considered, just a few hundred million. But I think about stuff like this for a living. Here’s why you can safely ignore this article.
There is always someone predicting an upcoming market crash. People like Grantham (cited in the post) have been predicting a mega crash for most of the last decade. Market crashes occur every 10-20 years but the thing is, over that 10-20 year cycle the market is always net up, so if you sit out the cycle because of worries about an upcoming crash you could easily miss out on 5-10 years of great returns.
The post author frequently compares flow variables (eg earnings, GDP) to stock variables (eg market cap). That’s not necessarily terrible, but the ratio is always sensitive to interest rates (because the stock variable discounts future values of the flow variable, and when rates are low the discounting has less of an effect). Market cap/earnings and market cap/GDP are high now because interest rates are low (asp because growth expectations are high, but that’s not necessarily incorrect). Before the dot com crash US interest rates were 6%, compared to 0.25% now — of course that skews the statistics.
Michael Burry is cited as “someone with a proven track record of predicting market crashes” but in fact he predicted exactly one crash. Well, so did John Paulson, and the ensuing decade proved that it was just luck. Mark Cuban “predicted” the dot com crash. It doesn’t mean they are geniuses, it means they got lucky once.
Growth in margin debt is cited as a reason to worry. But margin debt has grown because assets have grown. The S&P 500 has double since the lows of March 2020, so the fact that margin debt has doubled is not a cause for concern. As a percentage of assets, margin debt has been stable for the last decade.
This post is pointless fearmongering, nothing more. Of course, there will be a crash at some point. It could be in six months, a year, five years or ten years. This guy can’t predict it any better than anyone else can.