> Although if you can do well at that, you're wasting your time giving the results to Numerai.
This is the fundamental break down in proposals like this (Numerai, Quantopian, etc).
For anyone who can consistently generate alpha, why bother with a crowdsourced model? They can just go join any one of the hedge funds that will pay half to several million each year in compensation for that acumen.
Sure. But that doesn't meaningfully negate my point. In fact it strengthens it - if you can generate alpha on the strange "homomorphically encrypted" data they've got, you can do it in the actual market with transparent data and more control far more profitably.
I'm not saying someone is going to do well and leave with the data. I'm saying anyone who can do well should probably just participate in the real market.
And as another point, Numerai lacks entire categories of data outside the conventional "core financial" that is useful for finding alpha.
> if you can generate alpha on the strange "homomorphically encrypted" data they've got, you can do it in the actual market with transparent data and more control far more profitably.
Sure. Now go get "transparent data"...oh wait, that's also time-consuming (and much less interesting). That's why, if one doesn't have to search for tradable data, it might be interesting to validate a signal/strategy on data that someone with stake says is tradable.
Agreed that if one starts making numerai money with numerai data, one should definitely go get some transparent data and start trading it. Trouble is, now one doesn't know what transparent data one has actually learned, so it's hard to know what to go and spend time on trading.
At that point, though, (I guess this is the theory, at least), numerai presumably know that one has a good signal, and one also knows one has a good signal for something, so both parties know that one's signals are valuable. That should be enough to get one a job at a place that does have good, transparent data.
Assuming that's a job which you want. Some people want to screw around with a project for a while and this is a good opportunity to test your skills on something interesting and real.
Worst case scenario you get some "free" money and some other people you don't know get rather more money out of it.
2 counterpoints:
1. buying data is expensive
2. running a fund is a completely different skill than building predictive models (back-office, compliance, etc.)
This is the fundamental break down in proposals like this (Numerai, Quantopian, etc).
For anyone who can consistently generate alpha, why bother with a crowdsourced model? They can just go join any one of the hedge funds that will pay half to several million each year in compensation for that acumen.