Steve Cohen doubles down while many are throwing in the towel on quant strategies. Don’t be blinded by the science, apparently, Ph.D. mathematic boffins are also clueless on how to trade these markets.

For many Quant funds, it seems like a deja vu of December’s heavy losses. Quant funds select securities using complex quantitative analysis where investment decisions are primarily based on numerical methods rather than by human judgment. But the rocket science, applied to market trading, has yet to prove itself to be consistently profitable

Steve Cohen doubles down while many are throwing in the towel on quant strategies

 

Steve Cohen doubles down expanding his Point72 and hiring the best of the best

Yet many quant funds have decided to close shop nursing some heavy losses on their books. 

HBK Capital Management is the latest hedge funds wagering on algorithmic trading to call it a day. The Dallas-based firm which manages a total of $8 billion, is liquidating a more than $400 million quant fund and returning capital to investors, based on a statement Friday, according to Bloomberg. 

HBK Capital Management ditches quant strategies, meanwhile Steve Cohen doubles down 

Here is what HBK Capital Management had to say.

“HBK’s decision was prompted by a revaluation of its equity statistical arbitrage effort, which performed exceptionally well through 2014 but less well in recent periods” according to the statement from the $10 billion firms. “Although recent performance compared favorably with many similar funds, it did not meet HBK’s return objectives”.

“Although recent performance compared favorably with many similar funds, it did not meet HBK’s return objectives

HBK Capital Management

HBK is the latest fund to fall amid hard times, struggling to make money amid bouts of market volatility.

2018 wasn’t much better with an eye-watering $19 billion being pulled from quant funds last year

Steve Cohen doubles down during a period where Investors yanked $8 billion from quant funds in the first four months of this year

According to data from eVestment. What’s more, 2018 wasn’t much better with an eye-watering $19 billion being pulled from quant funds last year. 

Even the so-called ultimate champion of quant investing, Cliff Asness, used the words “crappy” and “terrible” to describe his funds latest performance.

“It’s not just one factor that’s not working” said Ian Heslop, London-based head of global equities at Merian Global Investors, who manages the firm’s absolute return fund. “It’s a material cross-section of standard factor implementations that are not predicting stock returns at the moment.” 

Here is what crappy and terrible looks like in a chart.

So Steve Cohen doubles down in quant investing, in what could turn out to be not much more than sleek marketing

A quote from Warran Buffet comes to mind, “Never invest in a business you can’t understand”.

TRADING SOFTWARE

Dan Loeb targets Sony. Dan Loeb is an activist investor and founder of Third Point, which oversees about $14.5 billion in assets.

Last year the activist investor viewed Campbell soup as a bargain when Third point reported that the soup maker could fetch a takeover value of $52 to $58 per share.

A year later and the activist investor Dan Loeb targets Sony

Dan Loeb's activist hedge fund Third Point is raising an investment vehicle to generate between $500 million and $1 billion so it can continue to buy Sony shares, according to a recent report in Reuters.