It’s all relative. Renaissance is famous because they do it on (low) double digit billions. On the other hand, 80% at a proprietary trading firm - where you might be working with double digit millions - isn’t spectacular. I can tell you that several small outfits in Chicago and the Bay Area return well over 200% consistently. But they are severely capacity constrained and basically disburse profits to the partners and traders each year. Their capital is only in the eight figure range.
I don't think its inconceivable, but comparing it to a hedge fund makes it look pretty crazy. First note that they look more like a prop fund, in which typically returns are labor-constrained rather than cash-constrained. Annual returns there aren't really comparable to investing, as they're more performing services (like arbitrage) for the market than putting in money. Second, the fact that being able to invest is a perk of employment means that part of their pay structure is via Medallion returns. Income that other firms would have to subtract from returns because it is spent on payroll still counts for Rentech even though said returns are going to employees.
Why? You don't need to do a ton of constant trades. While my portfolio is fairly small, I make probably half a dozen year and sometimes less or more but in total it averages to 500-1000 percent a year
A good starting point..if wall Street is consistently shitting on a stock, it's probably something to check out and do some research on.
their gross return is probably just a couple percent but then they leverage the crap out of it, which they can easily do since the strategy is designed to have very low volatility.
