Skype and the hedge fund problem
Hedge funds work on a simple wisdom-of-the-crowd principle: Because they involve an extremely large number of transactions, which smooths out the vagaries of individual transactions, the movements of financial markets follow predictable patterns, which can be discerned from a study of their past behavior. Deviations from the patterns tend to be shortlived, and by making huge bets that the deviations will quickly return to the norm, you can make a whole lot ... Full Story »
Posted by Kaizar Campwala
