All Segments
Hedge funds make billions from simple secrets
3 segments available
From my conversation with Nat Friedman, former CEO of GitHub. Watch the full video here: https://www.youtube.com/watch?v=qcvMjoJdck4 Or read the transcript here: https://www.dwarkeshpatel.com/p/nat-friedman Twitter: https://twitter.com/dwarkesh_sp Apple Podcasts: https://apple.co/3oBack9 Spotify: https://spoti.fi/3S5g2YK
Segments Timeline
The Impact of Sharing Trading Strategies
In this segment, Nat Friedman discusses a surprising revelation from traders at a successful hedge fund regarding the potential consequences of sharing their trading strategies publicly. He highlights that if their smartest trader were to reveal their strategies on a Twitch stream, it could lead to an 80% reduction in profits, emphasizing the value of secrecy in hedge fund operations.
"I asked some traders at a very successful hedge fund, if you had your smartest trader get on Twitch for 10 minutes once a month, and on that Twitch stream, describe their 30 day old trading stra..."
The Cost of Sharing Trading Secrets
In this segment, Nat Friedman reveals a surprising insight from traders at a successful hedge fund regarding the impact of sharing trading strategies. He discusses how a simple Twitch stream by their smartest trader could lead to an 80% reduction in profits, highlighting the value of secrecy in hedge fund operations. The traders believe that even a 10-year look back window would only slightly mitigate this effect, emphasizing the importance of maintaining competitive advantages.
"I asked some traders at a very successful hedge fund, if you had your smartest trader get on Twitch for 10 minutes once a month, and on that Twitch stream, describe their 30 day old trading stra..."
The Longevity of Trading Secrets
Friedman continues to explore the concept of trading secrets by asking hedge fund traders how long they would need to keep their strategies under wraps to mitigate the impact of disclosure. The traders suggest a look-back window of 10 years, underscoring the critical importance of maintaining confidentiality in their high-stakes trading environment.
"And then I asked, how long would the look back window have to be before it would have like a relatively small effect on your business? And they said 10 years. These folks make billions of dollars ..."