Very important to understand that making $500k speculatively is not evidence of an 'edge', nor is trading frequency evidence of the absence of luck. From March 2009 through much of 2010, the market was strongly bullish - if his algorithm showed a positive market bias then his returns would primarily be a function of timing (read luck: and there are a million variants on the nature of the bias that could be unwittingly responsible for his returns, despite the frequency of trades).
We cannot even tell if $500k is a good risk adjusted return - we have no information on volatility, nature of the exposure or most importantly how much money he started with?
Not exactly shocked Jim Simons didn't return his email. But completely shocking that he walked away from a successful automated trading strategy... the only thing rarer than a free lunch is a man willing to walk away from one. suspect.
1. I cannot get even a remote sense for the nature of his risk exposure from looking at his daily returns.
2. ok.
3. The point here is that a systematic bias in his algorithm will expose his trading strategy to the good graces of market fortune (luck) regardless of whether he trades a million, billion or once a day. The source of the bias is irrelevant.
4. did not see where he said that but that very much confirms 'timing' / which in this case I interpret as luck as being at least a contributing factor.
We cannot even tell if $500k is a good risk adjusted return - we have no information on volatility, nature of the exposure or most importantly how much money he started with?
Not exactly shocked Jim Simons didn't return his email. But completely shocking that he walked away from a successful automated trading strategy... the only thing rarer than a free lunch is a man willing to walk away from one. suspect.