“If any of my competitors were drowning, I’d stick a hose in their mouth and turn on the water. It is ridiculous to call this an industry. This is not. This is rat eat rat, dog eat dog. I’ll kill ’em, and I’m going to kill ’em before they kill me. You’re talking about the American way — of survival of the fittest.” -Ray Kroc
We are not saying you should follow the advice of Ray Kroc, but he may have a more insightful handle on the describing what really happens in business. We often use words like creative destruction" or pure competition without providing description of what that means. There is no question that the hedge fund world is closer to the Ray Kroc vision. With trades often being crowded and alpha being finite, there is a fight for limited excess returns.
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