"The most likely explanation for the success of Medallion is that Rentech assigns ex post the best strategies to Medallion."
Everything I've read (and you obviously have to take it with a grain of salt) doesn't agree with this assessment. The core fund trades commodities and stocks/options in a pair format with short holding times. To make their public fund, they needed to adopt more scalable strategies which meant longer holding periods.
So it's not a matter of choosing/assigning ex post - they are fundamentally different approaches. They said up front that the public fund wouldn't replicate the internal fund. Whether people listened to them or not is another question.
I get that we should be skeptical, but by the same token I don't think you can says fraud is happening without any evidence. Yes, they had a tax case - but that was related to their derivatives contracts and the tax handling of them. Clearly they were wrong on that - and they've stopped using them - and still been up huge after that.
I'm just not clear why we should assume fraud just because they are successful. To me, it looks like tiny profits magnified by enormous leverage - but with holding periods and market neutral positioning to reduce risk.
Everything I've read (and you obviously have to take it with a grain of salt) doesn't agree with this assessment. The core fund trades commodities and stocks/options in a pair format with short holding times. To make their public fund, they needed to adopt more scalable strategies which meant longer holding periods.
So it's not a matter of choosing/assigning ex post - they are fundamentally different approaches. They said up front that the public fund wouldn't replicate the internal fund. Whether people listened to them or not is another question.
I get that we should be skeptical, but by the same token I don't think you can says fraud is happening without any evidence. Yes, they had a tax case - but that was related to their derivatives contracts and the tax handling of them. Clearly they were wrong on that - and they've stopped using them - and still been up huge after that.
I'm just not clear why we should assume fraud just because they are successful. To me, it looks like tiny profits magnified by enormous leverage - but with holding periods and market neutral positioning to reduce risk.