Why are hedge funds earning the most money since 2004?

If I were to guess it would be software and fast computers. By crunching the numbers with enough numbers and following what happened in the past, one could basically be able to predict with a greater or lesser degree of accuracy the next weeks or months. This would not be specific but it would be enough to know when to buy and to know when to sell. When you have enough information at your fingertips through long term number crunching and statistics you can then more accurately predict what the stock market is going to do.

However, you need a really high speed supercomputer with the capacity to understand and number crunch a wide variety of facts in any 24 hour to 2 week to 2 month period to do this.

So, for example, you would grab all the facts you can as variables for stocks, then you crunch the tendencies in the past, then you predict (as best you can) given the facts you have.

You might not be 100% accurate but you only need to be 55% to 60% accurate in buying and selling to make a very large profit in the short and long term of things. It's sort of like being a gambler where you have access to a lot more facts than most gamblers do through supercomputers.

This is my thought on this. The only other possibility is a whole lot of insider trading going on.

Also, you have right now the ideal model to make money with the stock market gyrating up to 1000 point in a week or month up or down. A buyer sells when it is high and buys when it is low. So, timing your buys and sells is the name of the game.

The only problem with this is when millions or billions of dollars are in trades like this the timing also can cause these 1000 point ups and downs in the market themselves. So, traders worldwide to some degree are causing this volatility themselves.

So, what is said by market analysts is also what is helping the market go up and down as well. All these factors are producing the best hedge fund earnings since 2004. So, likely the combination of millions and billion dollars in trades and what is publicized in the news together are causing these 1000 point shifts up and down lately in the DOW.