It’s a sound point. Even a very small edge in precognition or mind reading (no matter how unreliable) would allow hedge funds to beat the market and make a killing. Ergo these effects do not exist because nobody is doing this.
> Even a very small edge in precognition or mind reading (no matter how unreliable) would allow hedge funds to beat the market and make a killing. Ergo these effects do not exist because nobody is doing this.
It is known that many people who consider that they might have psychic powers are on the highly sensitive side.
Knowing people who are highly sensitive, I can easily imagine that the enormous stress, pressure and greed in a hedge fund environment would make hedge funds a horrible work environment for such people.
A single psychic hedge fund manager wouldn't reveal themselves, but as an industry if you're trying to hire psychics it would not be possible to keep this fact secret.
If you fail too hard at investing you have to quit, but if you’re too successful you also quit because you retire or the technique doesn’t work for too large a fund.
Note, “just hold index funds” as a strategy should be dominated by “borrow a lot of money and put it in index funds” by the same arguments. Don’t see robos offering that though.
What about his track record cannot be adequately explained by mundane insider trading?
Edit: Puzzled by the downvotes. I think it's entirely fair to ask whether Cohen is enough of an outlier that it requires a psychic explanation, even after accounting for the degree of success that can be reasonably attributed to luck and non-psychic skill (effects which other hedge fund managers are also subject to) plus the insider trading he's been involved in (which other hedge fund managers are not necessarily subject to).
In a world with a finite number of hedge fund managers, there is always going to be somebody who is the most successful out of the bunch, and that somebody is almost certainly going to appear to be an outlier even without a supernatural influence on their success. So before attributing anything to psychic powers, we first have to establish whether he's too successful to be accounted for by the non-psychic explanations. I genuinely don't know enough about Steve Cohen's track record to know whether he's that much of an outlier, and I'd appreciate some real information about the degree of his success rather than just downvoting.
