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Understanding Jane Street

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Re: Understanding Jane Street

#171

Post by quickthrower2 »

paulpauper wrote: post #33
quickthrower2 wrote: post #12

Earlier quoted context omitted.

So you are doubling your money each year? Do you have a forward strategy to keep that up? Looking for people with good track records is a terrible way to choose traders. See: https://m.youtube.com/watch?v=zv-3EfC17Rc Tldw: meets a person, picks 5 horse winners, gets then to invest. How did he pick 5 winners? Emails 1000s of people, using a permutation per person. The person who sees the 5 wins thinks he has a system.…

It depends if you are getting new money or not. For a lump sum investment, depending on market cycles it's possible to structure the trade to optimize returns. If you assume that bear markets are every 6 years , there are certain simple integrals for computing this in which you input a certain starting capital and then a certain risk -free rate and then the capital is split between two assets like cash and stocks. Wh…

I think COVID is enough to disprove this idea. That was the bear market that turned bull ... for some sectors but not others. I don't think the cycles are predictable enough to make more profit (on average) than a buy the index strategy.

The highly mathematical quants hired by trading firms are doing something pretty different. They are trying to find opportunities for profit wherever they exist using advanced techniques. It is much different to you or me casually using what seems like a "common sense" approach. Most people who say "of course it will..." find that the next quarter is the exception to their definite rule about how everything works.

Re: Understanding Jane Street

#172

Post by andbberger »

data_maan wrote: post #102
uniqueuid wrote: post #82

Earlier quoted context omitted.

That sounds as if you can jump into a field without spending 10-20 years of learning and do cutting-edge research. I'm not sure whether someone who has done quant finance can make meaningful contributions to the actual science. So if your role ends up spending money and doing top-level management, why not just fund companies that do and stay in finance? [edit] To add one prominent example - it's doable, as Jeff Hawki…

I think Hawkin's work (including things done at Numenta, his company) is highly controversial in neuroscience. I have read some of the articles and claims and the biggest issues is that he produces a lot of vision papers, that contain no actionable models and thus ultimately are useless. So either he's withholding whatever concrete insight he found, or he hasn't found it yet - I believe the latter is more likely.

whatever you may think about his work, he founded redwood and they do incredible work

Re: Understanding Jane Street

#173

Post by TrackerFF »

mkl95 wrote: post #159
SilverBirch wrote: post #137

>the winners get a job from which people routinely retire rich in their 30s, and the losers... don't Honestly, I find this ridiculous. Firstly, Yes, working at Jane Street is a well paying job and you'll do well out of it. No. People aren't routinely retiring in their 30s. I don't understand where this absurd idea comes from. Look at all the rich people in the world, look at how old they are, and ask, are they retire…

> Look at all the rich people in the world, look at how old they are, and ask, are they retired? No! People who are driven and smart don't suddenly earn their first $5m go off and buy an annuity. They're more likely to go off and found their own trading shop at 30 than they are to retire. This kind of debate needs to be backed up by numbers or it won't be very productive. To get started we should know the percentage…

Yes, all depends on how you spend your money. $5m will get you something decent in Manhattan, but you could live like a King somewhere else. I have a friend that retired off just over $1m as he moved back to his small hometown. House cost $30k, drives the same car for 15 years, lives frugally.

Re: Understanding Jane Street

#174

Post by md_ »

keepquestioning wrote: post #4

My greatest regret is not getting into this firm

Fifteen years ago I had a job offer from Jane St sitting in my inbox, and I turned it down to work in tech.

Could I have made more money at Jane St? No idea. Probably? But money isn't exactly holding me back right now.

Would I have felt like I was working on interesting problems? For me, personally, I don't think so. I don't find abstract problems as interesting as I do practical ones, and, practically, working at Jane St is working to make a few rich guys incrementally richer. Not really a problem I'm interested in, I guess.

(As an aside, it seems to me retention is much higher in tech than it is on Wall St. The rosy view of this seems to be that Wall St pays so well that everyone retires early, but then again, there's a reason they call it "compensation.")

You have to make your own choices. Jane St has a gleaming reputation--and maybe, for you, it would have been a perfect match!--but not getting hired there seems to me to be a strange thing to consider a "greatest regret."

Re: Understanding Jane Street

#175

Post by lightbendover »

FabHK wrote: post #157
jaycroft wrote: post #127

Earlier quoted context omitted.

But it doesn't have to happen at the exact same time? Limit orders exist, no?

Further: Suppose you had an auction on shares once an hour, or even once a day, but no continuous trading. Would that make the world any worse off? (except for high frequency shops?)

While not the spirit of your question, I would love to see the system that could resolve global NYSE hourly demand at an hourly cadence.

Re: Understanding Jane Street

#176

Post by ThinkBeat »

SilverBirch wrote: post #137

>the winners get a job from which people routinely retire rich in their 30s, and the losers... don't Honestly, I find this ridiculous. Firstly, Yes, working at Jane Street is a well paying job and you'll do well out of it. No. People aren't routinely retiring in their 30s. I don't understand where this absurd idea comes from. Look at all the rich people in the world, look at how old they are, and ask, are they retire…

It is possible that people who chose to retire after they feel they have enough people to do it, would not be noticeably visible. Why spend time covering a guy who has retired and living a quiet life?

Re: Understanding Jane Street

#177

Post by carnitine »

nly wrote: post #104
paulpauper wrote: post #76

Earlier quoted context omitted.

I hope the author(s) do Medallion next. Medallion has probably gotten more scrutiny than any other fund, yet 3 decades later it's still as opaque as ever beyond vague 'statistical methods'. It makes a lot of money no matter what. It's more tight-lipped and exclusive than Jane Street. I don't even think anyone knows even if it's doing market making or not. Or if it's making short-term directional bets. You would think…

It's probably pretty easy to keep the returns on a pot as small as $10bn sweet if you just reserve all your best alphas for that fund. There are proprietary trading firms trading pots that size for a single shareholder. What I've been told is that Rentech also effectively use their public funds as a source of revenue to juice development of proprietary platform, so some of it is business cunning rather than a hard te…

To even have those ‘best alphas’ in the first place and then select them in advance for your best fund is the impressive part. The returns are insane even if the fund is capped.

Re: Understanding Jane Street

#178

Post by srfvtgb »

keepquestioning wrote: post #4

My greatest regret is not getting into this firm

So you didn't get as rich as you could have and might not get to retire at 30, go live your life. A friend of mine and I both applied for a HFT firm out of university, he got in and I didn't, but based on how he described it over about 18 months working there, my greatest regret would have been taking that job, it sounded like a dismal place to work (with platinum handcuffs).

Re: Understanding Jane Street

#179

Post by david_allison »

md_ wrote: post #174
keepquestioning wrote: post #4

My greatest regret is not getting into this firm

Fifteen years ago I had a job offer from Jane St sitting in my inbox, and I turned it down to work in tech. Could I have made more money at Jane St? No idea. Probably? But money isn't exactly holding me back right now. Would I have felt like I was working on interesting problems? For me, personally, I don't think so. I don't find abstract problems as interesting as I do practical ones, and, practically, working at Ja…

In my experience, retention in quant finance is much higher than in tech (barring a few firms)

People don't leave.

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