HFT is the new active manager. - They manage a lot of $ - They don't track an index - They adapt with the market - They're 50% of market volume - They're in the market to make $ - They focus on risk management
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bullet 1 might warrant further work
A good point - if they don't manage a lot of $ relative to the big classic active funds that would imply their returns are just that much better on a smaller base.
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my take is that while the sharpe's look great, it's really about sale of a product -- liquidity -- than an investment strategy. and can't accommodate the capacity of a good l/s HF AUM (viking, maverick, third point), let alone a proper active manager at scale (fido, cap,
$ivz). -
In some circles I've heard active management described as the art of providing liquidity. "Apple's stock price is too low, I'll provide liquidity to eager sellers by buying shares on the cheap" and vice versa...
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