<story><title>A California hedge fund bulldozed state labor laws, imposed harshest noncompetes</title><url>https://www.businessinsider.com/how-hedge-funds-skirt-california-noncompete-ban-what-means-ny-2023-9</url></story><parent_chain><item><author>sna1l</author><text>&amp;gt; In 2017, The Wall Street Journal reported on the difficulties faced by the firm. At that point, Voleon had an annualized return since inception of 10.5%, below the S&amp;amp;P 500 index return of 10.7% over the same period. One of the problems encountered was that financial markets were chaotic, and machine learning systems were best applied where patterns were more repeating in nature. In addition, patterns that are found can be easily made redundant after investors notice them and take advantage on them. Gary Smith writes that patterns discovered by the algorithms are often simply coincidences rather than actual correlations.[2][3][7]&lt;p&gt;&amp;gt; In 2018, Voleon had a return of 14% during a market turndown where the S&amp;amp;P 500 index dropped 6.2%. However, in 2019, its returns dropped to 7%, below the returns of its hedge fund peers of 9.2%. In 2020, Voleon&amp;#x27;s flagship fund lost 9%.[6][8]&lt;p&gt;Given their returns, how do they have 7.6 billion AUM?</text></item></parent_chain><comment><author>giraffe_lady</author><text>They nearly matched the market in a good year, and beat it very well in a bad one. Hard to say for 2019 since the quote switches to comparing them to &amp;quot;hedge fund peers&amp;quot; instead of the broader market.&lt;p&gt;As someone else is pointing out that&amp;#x27;s very close to the intended behavior of hedge funds. Entities with money in hedge funds also have money in indexes. They aren&amp;#x27;t necessarily looking for just &amp;quot;the market, but more&amp;quot; they want uncorrelated behavior to &lt;i&gt;hedge&lt;/i&gt; their exposure.</text></comment>
<story><title>A California hedge fund bulldozed state labor laws, imposed harshest noncompetes</title><url>https://www.businessinsider.com/how-hedge-funds-skirt-california-noncompete-ban-what-means-ny-2023-9</url></story><parent_chain><item><author>sna1l</author><text>&amp;gt; In 2017, The Wall Street Journal reported on the difficulties faced by the firm. At that point, Voleon had an annualized return since inception of 10.5%, below the S&amp;amp;P 500 index return of 10.7% over the same period. One of the problems encountered was that financial markets were chaotic, and machine learning systems were best applied where patterns were more repeating in nature. In addition, patterns that are found can be easily made redundant after investors notice them and take advantage on them. Gary Smith writes that patterns discovered by the algorithms are often simply coincidences rather than actual correlations.[2][3][7]&lt;p&gt;&amp;gt; In 2018, Voleon had a return of 14% during a market turndown where the S&amp;amp;P 500 index dropped 6.2%. However, in 2019, its returns dropped to 7%, below the returns of its hedge fund peers of 9.2%. In 2020, Voleon&amp;#x27;s flagship fund lost 9%.[6][8]&lt;p&gt;Given their returns, how do they have 7.6 billion AUM?</text></item></parent_chain><comment><author>infecto</author><text>Not defending this fund or any other hedge and I do not know the defined purpose of this fund but they generally exist to hedge your risks and are not there to beat the S&amp;amp;P500. Thats why they exist for accredited investors and not your regular investor saving for retirement.</text></comment>