"A wise American hedge fund manager once said..." | quant trading clips
Tribeca
Joined June 2026
- Tweets229
- Following30
- Followers724
- Likes117
The Quant Clips retweeted
Ex-CEO of Deutsche Bank's $6B internal hedge fund platform Roger Ehrenberg (@infoarbitrage) on why you can't rely on offsetting correlations:
"What it also taught me is that negative correlation can very quickly go away in discontinuous markets, where essentially correlations all go to one."
"It gave me an appreciation for having there be an aggregate amount of risk across all of your strategies that you're comfortable with and not to rely too much on offsetting correlations in times of market stress."
"Being extremely robust in how you model the tails, because everything looks good in the middle of the curve. Once you get out to the edges, that's where things get scary."
"You can still be right and get wiped out."
Ex-CEO of Deutsche Bank's $6B hedge fund Roger Ehrenberg (@infoarbitrage) on why he's not all in on the AI trade, his answer to Cliff Asness's "VCs are laundering volatility", & why most venture money is lost on the second check, not the first.
Roger Ehrenberg (Former President & CEO of DB Advisors, Deutsche Bank's $6B internal hedge fund platform | Founded IA Ventures, early in The Trade Desk & Wise | 3x Forbes Midas List | Managing Partner at @gamechangersvc)
We cover:
- Running 20 trading teams across stat arb, HFT, CTA & special sits, and how he sized PMs up and down
- Why correlations go to one in a crisis, and how LTCM lost $4.6B "in the blink of an eye"
- Using time horizon as the second axis of diversification
- Sizing a book when semis move like this: "thesis right and tactically wrong"
- Why small managers can still print money as "almost a vol market maker" on small AUM
- Slugging percentage over hit rate: 25 shots on goal per fund, 2-4 winners, 5-10x net
- Why he'd sell secondaries in a company that went from $20M to $60B in three years
- The three traits of his best founders: contrarian idea, deep domain knowledge, and "mad"
- Why he chose impact optimization over raising billions
- How a junior should bet their career in the age of AI
00:00 Intro
00:32 Running DB Advisors’ $6B multi-manager platform and risk budgets
04:14 A message from Onyx
05:14 Correlations go to one: tail risk, crowding, and vol sizing
10:18 Small managers vs multi-manager platforms: AI, capacity, and LPs
14:23 From hedge funds to VC: is venture volatility laundering?
18:48 Right to win, slugging percentage, and portfolio concentration
29:22 Follow-on discipline, pro rata, and when to sell secondaries
33:57 Process errors, sunk costs, and why mad founders win
42:58 Why hedge fund instincts fail in early-stage venture
48:03 Wealth maximization vs impact: why he never scaled AUM
52:56 AI or bust? Interconnected risk and capital starvation elsewhere
58:42 Career moats for juniors as AI commoditizes skills
1:02:59 AI wealth concentration and rewriting the social contract
How China's regulators changed the horizon for quant trading.
Shengheng Investment's founder Cai Junfu, ex-GETCO trader:
"I think that's the goal for the regulator."
"They have a combination of, I would say commitments from their side to increase the fees, to slow down trading by moving the co-locations and matching engines. The overall effect is so that those ultra high-frequency trading firms will have less of an edge over the rest of the players."
"So you cannot just forecast what happens in one second from now. Maybe you have to forecast one minute or 10 minutes from now."
WorldQuant's founder Igor Tulchinsky on how WorldQuant hires:
"Talent is equally distributed around the world, opportunities not."
"We initially started going out to countries where people weren't typically looking for talent for hedge funds."
"Different regions tend to think differently also, and there's value in that."
"We look for people who have accomplished things, maybe won Math Olympias or otherwise demonstrated ability. Then we put them through many, many tests."
"Candidates can be green in the area of finance, but cannot be green in the area of quantitative sciences because those take a pretty long time to develop."
The Quant Clips retweeted
Now @DatabentoHQ is a unicorn.
@christinaqi is a generational founder!
Databento CEO Christina Qi (@christinaqi) on what actually worked when she raised money for her HFT fund, Domeyard:
"At first, we thought if we said like, oh, we're smart, MIT founders, that it would work. It turns out it didn't because everyone from our school is a smart MIT founder."
"The HFT angle really worked well for us because at the time there really wasn't a lot of new kind of HFT funds launching."
"Your goal for launching your hedge fund on day one is not to make a billion dollars. Your goal is to establish a track record."
"Your goal is to literally get your track record, get up and running so that you can raise your day two money."
Databento CEO Christina Qi (@christinaqi) on what actually worked when she raised money for her HFT fund, Domeyard:
"At first, we thought if we said like, oh, we're smart, MIT founders, that it would work. It turns out it didn't because everyone from our school is a smart MIT founder."
"The HFT angle really worked well for us because at the time there really wasn't a lot of new kind of HFT funds launching."
"Your goal for launching your hedge fund on day one is not to make a billion dollars. Your goal is to establish a track record."
"Your goal is to literally get your track record, get up and running so that you can raise your day two money."
Former Citadel, Millennium and HRT quant Giuseppe Paleologo on whether the most successful trader at Citadel just gets more capital:
"You do get more capital up to a point."
"There is like a natural limit where somebody can be too successful."
"Think of pods as stocks. You don't want to have 90% of your savings in Nvidia."
"There is just a natural limit to growth for strategies."
"Your P&L in the absence of costs goes more or less linearly, but your costs grow faster than linearly. So, there is a point where you just don't want to grow."
1
155
The Quant Clips retweeted
Citadel's CEO Ken Griffin on the most common mistake investors make:
"They invest in areas outside of their expertise. They assume that because they can do something well they can do something else really well. And it's just not that simple."
"Michael Jordan could have been a great football player. He's not going to be to football what he was to basketball."
"A lot of people that get in trouble in their careers investing extrapolate from their success in one area to another."
"You and I have both seen firms that look like ours wander into different investment strategies and different asset classes and often have a very difficult time because it's not the same skills."
"The nuances matter."
Research Affiliates co-founder Jason Hsu on why active managers find more alpha in China than in the US:
"85% of that market's trading activities are conducted by retail individuals."
"If you are a professional money manager, you have access to information, you can analyze it correctly, you're going to make the right decision, because the other side of your trade is constantly making the wrong decision."
"You don't want to compete against people who are as good as you are."
"Active managers are really skilled in the US, except they compete against each other so no one has an edge."
"There's a lot of alpha reservoir. Uninformed individuals supplying alpha."
Why would a quant fund publish how it invests?
AQR co-founder John Liew:
"Three of the four co-founders of AQR, we originally met as PhD students, and we were all getting our PhDs in finance at the University of Chicago."
"So in some sense, we grew up in a culture where if you had good ideas, you would write about them."
"The nature of the work that we do is, we're trading very liquid markets and we're not trading very high turnover strategies. So, they're not as sensitive to other people knowing about it."
"We've contributed a lot of the work that we do into the academic literature, you know, and I think we've benefited in a lot of ways from sharing it publicly."
2
31
3,408
The 2007 loss that gave Graham Capital a risk meeting every single trading day.
Graham Capital Management's founder and chairman Ken Tropin:
"We had a mortgage-backed securities trading team, and the marks that we had on our books from the dealers were not the marks that you could sell the bonds back at."
"I realized at that time that there were stresses in the market that weren't showing up in your marks. And we had to work very hard to get rid of that portfolio and shut it down."
"But it was a catalyst for us to start holding daily risk meetings at 930 every day at Graham."
"We've had meetings every day that the markets are open since then."
8
1,044
The Quant Clips retweeted
Renaissance Technologies CEO Peter Brown on arguing against Jim Simons to add risk during the 2007 quant quake:
"I ran into my office, and I found Jim, Bob, Paul Broder, who was the head of risk control, all holed up, and the office was full of cigarette smoke."
"Jim was interpreting every little wiggle in various graphs. He was really scared, and he wanted to cut back, and hard."
"I argued that we should not cut back, that this was gonna be the greatest money-making opportunity we'd ever seen, and if anything, we should increase our positions. But it was three against one."
"And then at one point, miraculously, the whole thing came roaring back, and indeed, it was an incredible money-making opportunity."
Winton's founder David Harding on why he stopped relying on trend following:
"If you don't change, if you don't innovate, then what you do will become less profitable."
"I've been lowering my forecast for the success of trend following year by year for years and years."
"I still believe that trend follow will make money in the future."
"It's just that you can't rely on it."
"It was a fantastic workhorse, but there's too much money in it and too much competition now, and those who don't innovate are doomed to die."
5
1,154
Jane Street on GPUs versus hiring:
"The research is incredibly valuable. The researchers are incredibly valuable. This is a good argument for buying more compute."
"These days we are in something like the range of tens of thousands of GPUs, and we will in not too long be in the range of hundreds of thousands of GPUs."
"These are clearly good investments."
"The biggest impediment to growth is that it takes time to really train people and absorb them into the culture."
"The real limiting factors are finding great people and having the mentorship capacity for them."
Todd Simkin, who led trader education at Susquehanna for decades, on why SIG would insure a shoe shop against the Eagles winning the Super Bowl:
"Ethan's shoe shop is going to make all purchases over the course of the year free if the Eagles win the Super Bowl."
"I would rather just pay one price now and no matter what, you guys are then going to stand willing to pay for those shoe purchases."
"We stood up a company in Bermuda that was able to face brokers or other insurers that had those risks, and we'd be able to take it on our balance sheet."
"We think there's a 4% chance that'll happen. We're gonna charge you as though there's a 5% chance. You're happy because you never have a $10 million hit. We're happy because we think we're making an extra $100,000 over our expectancy."
1
10
2,196
Locking AI agents down doesn't make them safe. It makes them useless.
Two Sigma engineer John Feminella:
"Each one of those is opening a different door to a different kind of risk."
"One tempting answer is to be heavy handed here or to give every agent the same short allow list of stuff that's safe to do and then block everything else. That's safe, but it's also useless."
"And then teams either give up on those agents or they find a way around the wall and both outcomes are costly."
"As author John Shedd wrote, a ship in harbor is safe, but that is not what ships are for."
1
122
