Is there any publicly available information on the hedge fund performance?
I see people staking 1000s of NMR on their models. Which is fine, they have probably validated it and trust it.
But is there any way to be sure that the company and NMR will be still around tomorrow?
I see higher risk in NMR as on staking!
Am I the only one with this thinking? Am I missing something?
Thanks
At the moment $6 288 939 worth of NMR at stake
Average 3 month return is 26%. That’s 104% annually!
(not even counting for exponential grows)
Assuming that these numers don’t change Numer.ai pays out $6M+ for developers per year.
Not counting other costs at all!
To keep management fee of the hedge fund below 2%, Numer.ai should have $300M under management.
Is Numer.ai anywhere close to this?
Is 100% (AVEARAGE!!!) return a reasonable expectation?
Isn’t it a Pozni sheme?
Or have I miscalculated something?
Thanks
No publicly available information on the how the hedge fund is doing, as they cannot say due to regulations.
You are also confusing the $6M+ with “actual” money. They pay us from a “vault” of NMR that they hold. They did not buy this NMR, they minted it. So in effect (not accounting for the development of the smart contract, etc) they are not “spending” that amount of money every year, it’s coming from the vault that they created. What happens when the “vault” runs out is another question that will need to be addressed a few years from now.
Also, the fact that they keep hiring new employees should tell you that they won’t disappear overnight.
@themicon, thank you for explaining that. But could you please be more precise in explaining exactly how regulation affects what they can say to us? I am not trying to challenge your statement, just trying to understand it. For instance, I am invested in other hedge funds and they seem to be able to tell me how they are doing. I mean, obviously I can see how they are doing, but the information appears to be pretty public also.
There are two type of questions that we might be interested in learning. The first is HF ROI. The second is the amount of interest, e.g., the present amount and the in-the-pipeline amount of real dollars to be invested. Is there any distinction between these types of questions with respect to regulations?
Also, there is the issue of hearsay. That is you say they are hiring and I too have heard from other sources that they are hiring, but I don’t really know the extent of that. How do you know about their hiring and why can’t they publicly say that? If they can say they are hiring, why can’t they say what their real-dollar operating budget is?
Given what I know about start-ups and how they operate, namely many start-ups essentially play a game of chicken with fate, then it seems to me that knowledge of hiring provides very little real information on the long term and in some cases even very short term prospects for a startup company. Call it bad luck or whatever, but I have the experience of companies hiring just months away from collapse.
Also, it seems to be that some information may be available to some participants in the tournament, but not to others. Why is that?
Again, I am not challenging this information, just trying to obtain better precision in the rules and limits of what they can or cannot say, and try to understand the discrepancies in the information, i.e., the existence of hearsay seems to suggest there are things that can be discussed.
Let me just say here that I think that some numerati, including founders, managers and other employees and even other tournament participants seem to be bothered by my questions. Please forgive me, I have the best intentions and highest hopes for the company. I apologize. I apologize to all.
@lackofintelligence You should watch and/or participate in the weekly office hours, fireside chats, daily scores streams. We know they have been hiring because the new hires have literally been introduced to us on camera in recent weeks on office hours and we’ve talked to them. (Also in rocketchat. nj has even linked to job listings.) There is no secret information that some users have – you just have to pay attention or get involved.
As far as the hedge fund, there are different regulations depending on how big they are, etc. Some hedge funds are required to declare certain things publicly, others are specifically prohibited from talking about that same stuff in public. The laws are byzantine, but they are real.
Wait-a-second: I listened attentively to the FC on January 7, however inconvenient it was to me. When the questions were asked on slido, why weren’t the items you have listed pointed out? If the hiring is relevant to the question, then why was that not mentioned in response to several earnest questions? Or is the whole hiring question an actual breach of those byzantine regulations, and for that reason it was not mentioned?
Again, hiring specifically is pretty low level information about a startup’s likelihood of lasting through any timeframe.
Regarding Numerai’s ability to discuss possible or contigent investors, I have a very clear memory of Richard Craib discussing the kind of investor that the HF is trying to attract. So there exists precedent for these kinds of discussions! Have the rules changed? What’s going on? Could someone elaborate on an explanation?
They never discuss the hedge fund on FC chats. (And you can watch that or any of the others videos at your convenience later on.) So any question about that will just be ignored. You are simply asking for them to put themselves in possible jeopardy and they just aren’t going to do it, nor should they The question of hiring doesn’t really have to do with any of this – we are just pointing out an example of something that we can plainly observe ourselves if you are desperately looking for hints about how things are going. If you don’t find the fact that they’ve been hiring, etc to be compelling in any way, then it really isn’t relevant at all (but others may find it so). Your very specific questions cannot be answered by anybody but the team themselves, and they may not even be able to do that as we keep saying. So go ahead and try to ask them privately if you wish and see if they respond. Otherwise, I think it should be assumed that we know everything that they are willing or able to tell us (of course it helps to actually look at the content and receive the information). And then you have to decide if you want to trust that or not. And if it isn’t good enough for you, then just don’t participate. Or accept the risk and continue on.
I just think the level of sophistication of the general forum reader is a little higher than you have inferred and is able to distinguish questions being asked that can be answered without putting the company in jeopardy and are not simply a request for investment advice. Also, I can’t address your response directly because of compound presumptions without so much work that it would dilute the significance of the remarks I have already made and already address those comments.
But thanks for trying.
Numerai GP is still registered as an Exempt Reporting Adviser, which means their hedge fund portfolio is less than $150mm, which means their AUM is likely well under $100mm, and even under $50mm if using typical quant fund leverage ratios.
Sorry but you can barely pay a staff of 5 on this AUM, let along a distributed research team of 100s…smells effectively like a ponzi to me.
Edit: 3/29/2021 filing shows Numerai One Master LTD with gross assets of $28.8mm. That’s play money. Paying contributors with NMR was brilliant but don’t fool yourselves and think this is a real business. https://reports.adviserinfo.sec.gov/reports/ADV/282851/PDF/282851.pdf
Or a startup using VC money. I doubt they are paying anybody with fund money at this point (nor should they). They may not be generating any fees at all yet, and that’s totally fine. The idea is to grow – over years. They have to have a track record. What hedge fund (that isn’t split off from some existing fund) is just going to start with AUM of billions? It may ultimately be very successful, it may ultimately fail, but these sorts of comments are just silly. They are doing exactly what they are supposed to be doing. Ponzi schemes involve always having to sign up new suckers to pay the old suckers. Numerai doesn’t sign up anybody to pay anybody else. (And they don’t need to constantly bring in new data scientists – they just need a reasonably large and diverse group, but it doesn’t need to grow indefinitely.) And the data scientists do get paid, so what’s the problem? Sometimes people argue that we are being exploited even if we do get paid because they will take our work and make their billions with it, but if your argument is that their AUM is piddly and they aren’t making anything, I guess that doesn’t sense either. Basically so far Numerai has been a giant giveaway to the community, not any kind of exploitation.
That is not quite correct I guess. They are flooding the market with NMR by giving it away to the stakers. So for the price to stay the same, enough new people have to buy NMR.
Or put it another way: If you want to sell the NMR you gained via stacking you have to find a new user who is willing to pay for them. (this is happening on the exchanges)
That’s a very tortured way to look at a crypto asset that is much like any other crypto asset. You have to find a buyer, not necessarily a “user” at all, and if it is a user it doesn’t have to be a new user. I know some people think they are all scams/pyramids, but come on.
THERE ARE LEGIT CONCERNS AND RISKS with Numerai (and any crypto project). It could all come crashing down. We don’t need to make up phantom ones though. It won’t be because it is all a scam or that Numerai isn’t a “real” company. (I do have some trust issues with Numerai these days, but not on that level.)
I agree it isn’t a scam or ponzi in the fullest sense of those terms - Numerai isn’t fraudulently misleading anyone. But the fact their fund is < $30mm at this point given years of enormous buzz suggests that a) fund performance has been very weak, and b) they are unlikely to ever raise a significant fund. Funds just don’t dawdle at negligible AUM and suddenly take off (unless they achieve a Voleon-like breakthrough).
This last point is what makes it ponzi-like - Numerai can only pay people out of a combination of 1) past operating capital fundraises (which they will likely not be able to tap again given the points above) and 2) a crypto asset that has no fundamental value if you assume their fund never gets traction. Knowing these two facts, NMR should be worthless right now. Insert line about the emperor having no clothes.
I agree that Numerai is not a scam and I very much like the overall idea of it. However, if this will be successfull total depends on the performance of the Hedge fund. Not having any information about this is a huge risk for any NMR holder. The fact that is it < $30mm makes it unlikely that the performance is good so far. I guess there is hope that Numerai Signals can give the fund more of an edge. I hope so, because I think the idea is really nice.
Richard showed a presentation in one of the fire side chats recently. The sharpe ratio of the fund started to rise over the benchmark in September last year. It’s been increasing since then.
So it took some time to achive this, but there is hope… 
Signals have huge potential. IMO lack of data is the bottle neck of the main tournament.
It is pretty clear to everybody and they’ve been pretty open about this that they didn’t really get it all figured out to an acceptable level (i.e. the dataset, the staking systems, their own trading, etc) until the kaz iteration of the tournament – so that’s been what, approx 2 years now? It is true that if the fund was just totally dominating in an unreasonable manner it would be pretty easy to sign up investors (Richard has also stated many times you never really have to go looking too hard for investors if the fund is killing it – they will come to you.) But that’s kind of pipe dream scenario – if the fund is simply doing what it is supposed to be doing and generating good returns and acting in the market neutral way it is supposed to, then it needs a decent track record, right? I mean I would think there are lots of investors that would be intrigued but simply are going to say “show me what you got after doing this for 5 years in a row” or something. This is is all new, there is going to be skepticism and that can ONLY be overcome with time and not just short-term good performance. So basically I think that “the emperor has no clothes” and “things are going exactly as they are supposed to be going” can look pretty much the same in the early stages of this project (and we are still in early stages) and there is nothing to do but wait and see where it is going. Is there some good argument that Numerai is in a WORSE position now than 1 year ago or 2 years ago? I can’t see one.
So I’m not trying to convince anybody that it is all going super awesome and that’s that, or that there isn’t a good chance that it will come to an unceremonious halt at some time (years from now), only that if you are arguing that the current situation and future outlook only and obviously spells disaster that you are being irrationally pessimistic just as others maybe are being irrationally optimistic. The team has seemed pretty happy with how things have been going since kaz got started (i.e. the last 2 years) – but maybe they are faking it? Other outward signs (including this uncovered RAUM figure) that we do know about also signal positive I think. (And remember about the AUM that they do have right now – from what I gather the largest chunk of it is Richard’s own money. He’s willing to risk it in the fund.)
some really big loose assumptions here for the assertion that NMR should be worthless
be honest, i don’t believe there is a real hedge fund behind this, or i don’t mind it is real or not. the guys invent this game from very beginning is smart enough to know, this game is really don’t need the hedge fund at back to get it running. threw a challenge topic, get the group of most smart people on the planet, sending the prediction weekly with gradually increasing of value of nmr. it is already a perfect design.
btw, the real value this game is force participant behavior as real hedge owner to prepare the data, build the model and present to the client. those model is already priceless.