Future and Stability of Fundamental L/S HF
Really interested in fundamental L\S HF world, but am concerned about index investing and AI disruptions possibly limiting my opportunities in the future. Please enlighten me on how discretionary L/S has some job security and protection against tech disruption.
Edit: Have read people saying dont pick a career based on future stability do what you enjoy, but I have alot of friends thats are CS majors with Masters and they are SOL right now so...
lol
Tell me why you are “really interested” in a field you clearly know very little about so as to ask silly questions like this?
I mean have you read Trillions by "Robbin Wigglesworth" (recommended by Elliot's Paul Singer in one of the very few "interviews" he's granted). Or even asked Perplexity.ai (very rudimentary understanding) about the secular and near term challenges facing the Hedge Fund industry overall. While I might not have the ethos or expertise you desire by asking this question, it is of my opinion (which may be wrong or hyperbolic and is why I asked) that to blatantly disregard these observations and their impact on the hedge fund industry and public equity markets is fool hardy and honestly pretty cope.
So in other words, you know nothing about the field? Got it.
Bro you are a paralegal lol why do you care about the future of L/S? It’s like me worrying about the future of supermodeling for Calvin Klein bc I am clearly very qualified to think about that sector
If I am so misinformed, please enlighten me. If I have evidently shown a lack of true interest due to the nature of my comment please supply me with some info to correct my misunderstanding and to help nurture a true well informed-interest. Just saying your dumb you don't know anything because of the question you asked is counterproductive.
I think the other poster - while admittedly a bit blunt - is trying to say that big decisions about what career to pursue shouldn't be based on a terse and incomplete understanding of what work is actually like (even if there are "headlines" about headwinds).
This industry has faced headwinds for a long time, but it evolves and changes. People have talked about AI impacts pretty sweepingly wtr to HFs (and everything else) for some time, just need to do some additional reading and searching. Before AI it was quant. It was also passive. End of the day, once you understand the nuance to the work, the headwinds and tailwinds will become more apparent. I wouldn't base a decision off a few one off replies on this forum. You need to think independently about what you enjoy/are good at, where those skills can be of value, and where you can thrive.
AI is exceptionally bad at some things right now, and really good at others. Once we surpass the issues with accuracy, its obvious it will be helpful in aggregating, organizing and finding the data you need faster (huge boost to efficiency). I'd be surprised if it got very good at understanding things like expectations and where things are sentiment wise; I'm sure it will get to level 1 thinking, but there is a ton more after that. Then a lot of stuff starts to come down to judgement and weighing things. Finding and interpreting raw numbers to come up with a range of outcomes is one thing, but the qualitative aspects that feed the significance of different numbers is another. There is also a creativity and human psychology aspect to this, which we are not close to yet.
Does this all mean that fewer people will get faster and more efficient. Absolutely. But the human PM and analyst is going to exist, just with more tools to become better informed and more efficient. (my opinion at least)
More importantly, just spend time learning what the real analysis work is focused on, as it will help to push your own decision making here from headlines (AI replaces everything) to the realities of disruption (what becomes more efficient, how do roles evolve, what processes will remain human). That is until we reach AGI trained on Citadel's top performers...
L/S equity will always be around because there will always be an idio component of returns to seek. As long as you think the future cannot be perfectly predicted then there will be space for over/under. Don’t worry too much about 10+ years out unless you have a crystal ball.
AI helps to speed up the process, it doesn’t remove the opportunity set. Would AI agents replace analysts and PMs? Nope. Human+AI will likely outperform AI alone. Tl;dr don’t be afraid of the future. Use it to succeed.
Thank you, really like your last line!
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