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November 2017 Update to the Community

Dear Quantopian Community,

Quantopian’s community powers everything: your feedback drives improvements in our platform; you support one another by answering questions in the forums; many of you help with maintaining our open source projects; and our business depends on your creativity in crafting investment algorithms. We return the favor of your attention by providing the best data, platform, and content that we can.

I wanted to write to you directly because I believe that you deserve updates on our business. Thank you for trusting us with your time and your passion.

In a few days, we will be launching new, free risk tools you need. Managing risk in the industry today depends on expensive and proprietary risk models, and we’re changing that. I will be writing to you again soon with more details about this important enhancement to our platform.

I also want to share that Quantopian and our CIO, Jonathan Larkin, recently parted ways. I am grateful for Jonathan’s time and expertise during his time here. Our fund is being managed on an interim basis by the other members of the investment team, all of whom have been actively involved from the fund’s inception in its daily management. We continue to allocate capital to community algos.

The journey to creating something great is never easy, and we are pursuing an audacious goal in public view. I expect the press may color recent events differently. Still, through your participation, the support of our venture investors, the trust of our clients, and the dedication of our employees, Quantopian continues to progress.

thanks,
fawce

Disclaimer

The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by Quantopian. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as none of Quantopian nor any of its affiliates is undertaking to provide investment advice, act as an adviser to any plan or entity subject to the Employee Retirement Income Security Act of 1974, as amended, individual retirement account or individual retirement annuity, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement or other investor, contact your financial advisor or other fiduciary unrelated to Quantopian about whether any given investment idea, strategy, product or service described herein may be appropriate for your circumstances. All investments involve risk, including loss of principal. Quantopian makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances.

20 responses

Fawce, thank you.

Paraphrasing a quote by Al Brooks, author of 4 books all sub-titled " .... price charts bar-by-bar for the serious trader":
The purpose of the press, especially the financial press, is simply to sell advertising, not to tell the truth or to help traders

:-)

Fawce,

I too want to wish Quantopian well on its journey forward. Like others, I was a bit annoyed at the way the "live trading" issue was handled - a lot too short term for my liking and a better bridge could have been built - but I imagine there were forces at work to which I am not privy that had to be kept secret. Not being a paying subscriber, I had no claim to more.

What Q accomplished in the 3 years of its start was amazing, and ground-breaking. I learned a lot from the community and will take those lessons - and the great apps I've built as a result - with me in my new setup. I've got one or two minor details to wrap up, and I'll have accomplished my goal of fully automated trading on my own secure platform. (For those interested, I've chosen the QuantConnect route, but backed up on my own Google cloud servers for avoidance of lockup.)

I will continue to furnish my apps for the Q competition, and hope to get selected for an allocation along the way It's a bit more complicated to participate in both. I obviously have to make sure my apps run on the python version and framework at QuantConnect, and then have to port these applications over to Quantopian so that they run there too. I thought this would be fairly simple. It is not! I've been at it for the last 6 weeks.

In fact, the difficulty of that transition has made me realize how good the Quantopian documentation has been.
I think the tools that Q has provided for backtesting and research are world class, and I look forward to any new ones they may bring.

Good luck in replacing the CIO.

I don't understand why the WSJ put out that hit piece tonight, highlighting a -3% loss for Quantopian since the summer... which really isn't as catastrophic as they made it sound. Haters gonna hate.

Just another typical case of journo making a "big story" when there isn't one. For something more constructive from WSJ, see last para of
https://www.forbes.com/sites/nathanvardi/2016/08/17/the-quants-are-taking-over-wall-street/#5c9d0fd666c9

Hi Fawce,

Always good to hear from you. Thanks for the update. It continues to be interesting as a participant in this experiment.

Best wishes,

Grant

@Anthony FJ Garner
writes: "The vague hope of an allocation in the future resulting from some trading competition does not cut it". ... Well it certainly needs to be clear, concise and definitely not vague.

Quantopian's own webpage https://www.quantopian.com/open states: "Over $120,000 awarded". I don't know how old that is, but it's what people see and, to anyone at a professional standard, it's not really very inspiring is it?

Personally I want to see Quantopian succeed, and to be part of that. There are lots of good things & good people in place, but a key factor that (I think) needs to be looked at more closely is "publicity management", and promptly too. I'm not referring to publicizing the Quantcons etc, which is done very well, but rather to proactively managing Q's image, especially in the press. As Jack Welch, former CEO of General Electric from 1981 to 2001, said: “Control Your Own Destiny or Someone Else Will”. We already know where at least one such "someone" comes from: the financial press, whose main aim often seems to be merely to create negative sensationalist nonsense for the sake of selling their advertising space.

Please Quantopian, do whatever is needed to take control of your/our image as a good, strong, professional and positive one.

The good thing is that they have data for all algorithms, so Quantopian can always lookback into history learn from their results and make adjustments if they need or require to. Even great hedge funds of today like Renaissance and Bridgewater had much more severe drawdowns early on in their history. But they were able to learn, adapt and improve. Hopefully Quantopian can do that as well. Consistent market beating strategies are just that much more tougher and difficult to implement than most people think or give credit for. I have confidence in Quantopian's team to be able to figure things out and be a success story.

Hi all,

fawce mentioned in his post that "[in] a few days, we will be launching new, free risk tools you need".

Well, we beat him by a few days :)

I encourage you to check out our announcement from this morning regarding the new Quantopian Risk Model: https://www.quantopian.com/posts/new-tool-for-quants-the-quantopian-risk-model

All the best,
Josh

Disclaimer

The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by Quantopian. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as none of Quantopian nor any of its affiliates is undertaking to provide investment advice, act as an adviser to any plan or entity subject to the Employee Retirement Income Security Act of 1974, as amended, individual retirement account or individual retirement annuity, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement or other investor, contact your financial advisor or other fiduciary unrelated to Quantopian about whether any given investment idea, strategy, product or service described herein may be appropriate for your circumstances. All investments involve risk, including loss of principal. Quantopian makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances.

A few days early, or maybe a day too late ;) Regardless, this is an amazing addition to the suite. It really helps steer algo development toward "pure alpha". I'm already using it to remove common factor exposure from my algo.

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Hi Fawce -

Instead of hiring a new CIO, could you appoint the crowd to serve in this capacity? Or from a regulatory standpoint, does it need to be an individual? Crazy idea, I know, but the whole idea here is to turn Wall Street on its head, right? Why play by the rules?

@Grant, ! OMG!!!! ;-))

And perhaps there would be a path for a crowd-sourced CIO to invest in the 1337 Street Fund (since presumably hedge fund officers can have skin in the game). The idea is starting to grow on me...

I don't yet see a posting for the open CIO position on https://www.quantopian.com/about#careers. I'd be curious what a hedge fund CIO job requisition looks like and what this person would do in the context of Quantopian/1337 Street Fund. Will one be posted?

@Grant I have always read with interests your comments on this forum, you have a view of what Quantopian could be that is really open, really crowd based, and crowd-rewarding. As far as I can see Quantopian has a more conservative view for their business and while I enjoy reading your comments and speculations I don't believe we will see any time soon such a open platform. Moreover it is not even proven that such a open platform would be profitable, so I don't find hard to understand Quantopian's choices, they are trying to build a profitable business with one or two revolutionary changes but all in all it's a conservative business: they use the crowd and they reward the few individuals who can make something unique. That's the deal, no small rewards for all the community members but stellar rewards for exceptional individuals. I known, it is not as revolutionary as you envision, but it is still a very interesting platform and the unique feature is what you can learn here.

@ Luca - yeah, I can't disagree. I should keep my blue-sky ideas to myself, and just conform. Plenty to learn, for sure.

@Grant, no need to conform, please keep sharing your ideas .

Well, I make the Q folks cranky when my comments stray into "business model" territory. It is largely a waste of time; they have picked a modus operandi and view forum discussions around how they could run their business substantively differently as a community distraction. And you may be correct that "it is not even proven that such a open platform would be profitable." They may be seeing that what they are doing is projected to succeed wildly and there is no need to change course. I do feel, though, that they could be missing something by not fostering a much greater sense of collective effort (not just with words, but baked into their business structure). Personally, I might do more if I felt that I was part of the business and not just another schmuck trying to get an allocation contract. Moving beyond an amateur, tinkerer approach takes substantive ownership and reward, as Anthony discusses in his blog post.

Initially, the full article was behind a pay wall. I found this, which doesn't require payment:

http://www.finalternatives.com/node/36146

I find it kinda odd, the statements:

He left in September, according to an article in the Financial Times citing unidentified individuals familiar with the matter. The fund, which started investing earlier this year, is said to be down about 3% since June.

Who are these "unidentified individuals familiar with the matter" and what does "is said to be down" mean (who is doing the saying?)?

Just curious, but it seems like from a regulatory standpoint, as a hedge fund that would be open to institutional investors (including public funds), this information would be part of filings anyway. Or maybe not? The article makes it sound like there is a Deep Throat involved, but I find that hard to believe. Probably just hype. Was there just an unofficial Quantopian press release?

Hi @Grant, i like reading your views too.
Honestly I think the article in question is something of a BS diversion, and that abbreviation doesn't stand for a type of science degree. In fact it seems to be something of a BS article in general. Its title "Quantopian CIO Said to Leave As Returns Disappoint" and the statement in the article: "The fund, which started investing earlier this year, is said to be down about 3% since June" both seem a bit strange. What's all this "... SAID TO ..." nonsense? Either Jonathon Larkin left Q or he didn't, and either the fund is down 3% or it isn't. Is the reader supposed to infer some suspicious causal link between the two ..... one way or another? Who knows! Does it even matter now anyway as far as Q is concerned moving forward? Personally I find it hard to believe much in the article at all. What about the mention of the supposed "500,000 algos" cited in the article? By my own estimate, the 400 or so most prolific people on the Quantopian site have written a combined total of about 30,000 algos (data available by clicking on each person's name and reading off how many algos they have written and summing the numbers) or alternatively by assuming that each of the 600 or so entrants in each of the 35 contests to date has submitted the maximum allowable number of 3 algos, then that total comes out to about 63,000 algos, although we know most of these are multiple submissions in successive contests, so the smaller number of about 30,000 or so submissions is probably closer to reality. I wonder where the author dreamed up his number that is larger by more than an order of magnitude. Personally I don't think the article contains much that is of genuine value at all. For sure I'm not losing any sleep over it (but i think we are going to have to do a hellava lot of algo writing to get close to the 500,000 cited by that silly author).