Pandemic Conditions Spotlight Human Money Managers

December 30, 2020 James Heinsman Hedge Fund News

In recent years computer-driven quantitative investing has made human decision-makers look outdated and less successful. That is until coronavirus reared its ugly genome. The year 2020 for many people has been one of tragedy and loss, but for flesh and blood stock-pickers the year proved to be quite profitable.

It seems that even for the most sophisticated quants, the complicated, roller-coaster year, was something confounding. Humans, on the other hand, were able to navigate through the dark forest and emerge with some of their best results in ten years. Tiger, Coatue, and D1 all declared returns surpassing 35%. This kind of bottom-line breathed new life into the notion that humans, under certain circumstances, can outperform machines.

“Stock-pickers had several years of self-inflicted under-performance in the past decade, and the narrative was that computers had defeated humans,” said John Thaler, a veteran equity manager who closed his fund in 2015 and started a new firm, Hampton Road Capital Management, in 2020. “Then, the quants hit an air pocket of tough relative performance, and this year, long-short equity managers outperformed by an enormous amount.”

Coatue, John Thaler, quants, Tiger,

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