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Takeaways from the Jane Street bond prospectus

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Re: Takeaways from the Jane Street bond prospectus

#241

Post by methodical »

tikhonj wrote: post #235
hyperbovine wrote: post #220

Earlier quoted context omitted.

> Most people would see this as wasteful NIH Because it is. What is the point of reinventing these wheels when gazillions of man hours have already been invested on open source tools that can do it better and cheaper?

1. You can do it better, with better taste. Existing tools are... not uniformly well-designed. 2. Building something for yourself is qualitatively different than building something for somebody else. (I've heard this described as "situated software"[1].) Both the results and the process are different. 3. Building something yourself lets you become an expert in the domain and the tool you're building, often faster and…

Wholeheartedly agreed.

Moreover, one thing NIH syndrome handwavers miss is that developing a custom situation-specific solution allows you to expand your knowledge in that discipline, create a more tailored solution, and avoid supply chain vulnerabilities that can come with using third-party packages. In my experience a handbuilt solution to a problem is going to be much more efficient in most cases than OSS out there, except in spot instances where the scale of the task is not able to be achieved in a small amount of code (e.g. a versatile graphing library), although these are /very/ few and far between.

Re: Takeaways from the Jane Street bond prospectus

#242

Post by cjbgkagh »

hyperbovine wrote: post #220
tikhonj wrote: post #207

Earlier quoted context omitted.

Jane Street has been doing this since they were much smaller. I interned there when they had like 300 people, and they were actively cultivating a great brand as an employer back then too—and looks like they've really made it work over the last decade! My impression with them in general was that they were willing to do lots of things that did not "conventionally" make sense at their size, and those things paid off. T…

> Most people would see this as wasteful NIH Because it is. What is the point of reinventing these wheels when gazillions of man hours have already been invested on open source tools that can do it better and cheaper?

I bring an inordinate amount of third part components inhouse for a solo dev company, so these tools/libraries only have one user. I do take return on investment into account and only bring things inhouse if I expect a positive net present value.

A few factors not normally taken into consideration;

- Tooling is a great place to practice transferable skills on a practical problem. This always annoyed me with the XKCD cartoon 1205 which didn’t take into account improvement in optimization ability from practice in optimization.

- I’ve had a few external library dependency rug pulls, open source and proprietary. It never happens at a convenient time and is a total pain in the ass. Contractual agreements won’t save you unless you’re ready to sue for breach of contract and even that is no real solution. Perhaps getting code in escrow could be an alternative but I’ve never seen that work out either.

- External quality is mixed and getting worse. I’m careful with my own code so most of the bugs I hit is in other people’s code. If it’s a small library it can easily be less work for me to bring stuff in-house than to debug someone else's crap.

Honestly I wish I didn’t have to bring so much in-house, it would have saved me a huge amount of work. But we don’t have an efficient market with clearly defined standard of goods where we could treat software as a commodity and I’m not sure if we’ll ever get that.

Re: Takeaways from the Jane Street bond prospectus

#243

Post by cityofdelusion »

pas wrote: post #223
zie wrote: post #213

Earlier quoted context omitted.

They provide market liquidity. The chances that a seller and buyer come together at the exact same time across the 7.5 hours of open market operations is fairly low, so they buy from sellers and sell to buyers and hold in between to keep the markets liquid. This liquidity costs(often advertised as the bid/ask spread). We could essentially close them down if we moved all trading to say 1 hour a day.

regular buyers/sellers can use limit orders, no? speculators can then sell/buy to/from them and if they are doing it well, they make a profit. (and help narrow the spread.) sure, great, they even inject some liquidity. but why do we want a narrow spread? it only helps people who don't know which side of the trade they would rather be on, no?

The bid/ask spread is never good, as it is a fixed transaction cost no matter what side you play. In fact, the equity under consideration has to move greater than the spread to even realize a profit -- with the spread, you are always "buying high, selling low". With very narrow spreads, the spread is only a few cents at most and this consideration evaporates.

The spread also compounds quickly. A wide spread indicates low volume and a sparse order book. This means if you need to offload even say 100 shares, you can single-handedly as a retail investor, widen the spread yourself and take an even larger loss.

Liquidity injects supply/demand and its always a good thing for retail investors. It goes past the stock market as well, spreads are why pawn shops, thrift stores, and even eBay can be profitable in certain goods and with other goods, not so much.

Re: Takeaways from the Jane Street bond prospectus

#244

Post by tombert »

cess11 wrote: post #240
tombert wrote: post #181

Earlier quoted context omitted.

Fair enough; I wasn't applying for a quant position, just a software job. Looking back, I suspect the real reason that they were even considering me was because I had professional Haskell and Scala experience on my resume, and so I looked appealing, particularly if a dropout was learning it for fun. What I find amusing is that I'm categorically a much better functional programmer now than I was then, with professiona…

They might want to shape developers on the job and bet that it's on average cheaper to do with functional-curious people rather than those that have professional experience in ML-languages.

Yeah fair, I definitely have developed pretty strong opinions on the "right" way to do things in functional languages, and those opinions likely do differ somewhat from theirs, at least in some cases.

I think if I want to work at Jane Street now, I either need to finish my PhD, or get a Masters degree from a sexy school to "cleanse" my WGU degree (despite the fact that I don't think I know much less than the average Ivy League graduate, though obviously I'm a biased audience).

Re: Takeaways from the Jane Street bond prospectus

#245

Post by zie »

infecto wrote: post #24
belinder wrote: post #20

Why do they say 179,000 million instead of 179 billion? Is that common in their industry?

Pretty common in finance across the board to use consistent units and to not use decimals. So in this case the following sentences mention $10 million, you would not want to say $0.10 billion. It depends on whats being presented of course but in large numbers like these, decimals make it harder to read.

This! Also because people regularly screw up units(forgetting to convert, etc), so if you keep them all the same, it's a touch harder to screw up.

Re: Takeaways from the Jane Street bond prospectus

#246

Post by myaccountonhn »

mrweasel wrote: post #78
anonyfox wrote: post #5

If I remember correctly they are also by far the biggest poster child for OCaml, right? Blub Paradox at play here?

Might also be that Jane Street is to OCaml what WhatsApp was to Erlang. Many ascribed the success of the small team at WhatsApp to their tech-stack, Erlang and FreeBSD. The reality probably was that they had hired really smart people, and those people choose to use Erlang (because eJabberd), but they could have been just as successful using another language. Yes, Jane Street uses OCaml, they have no reason to stop us…

It's very hard to determine if they succeeded because of or despite of in any quantified way. WhatsApp, Viaweb, Jane Street, NoRedInk are examples of where they succeeded with a smaller language and none of them afaik blamed the language but praised it.

However, I think if you are a company doing something boring and that can only pay average, then having an interesting tech stack (including a nice language), hiring globally and having good benefits might give you a venue to compete for talent. You'll need some kind of strategy.

Re: Takeaways from the Jane Street bond prospectus

#247

Post by andrepd »

EMM_386 wrote: post #200

> Jane Street is stupidly profitable — net trading revenues of $4.4bn in the first quarter, after a $10.5bn haul in 2023, and a profit margin north of 70 per cent — but it bears repeating. That is the fourth straight year of net trading revenues exceeding $10bn. Gross revenues came at a record $21.9bn in 2023, up 34 per cent from 2022. Yes, I suppose this is all something to get all starry-eyed over, Jane Street encr…

I do agree with you. It's neither sustainable not really desirable, the amount of effort and resources and smart people dedicated to the financial sector.

Re: Takeaways from the Jane Street bond prospectus

#248

Post by chronic739301 »

lotsofpulp wrote: post #192
sullyreed8 wrote: post #89

Earlier quoted context omitted.

> Some high level SWEs at Google are billionaires. The entire tech industry has fewer billionaires than quant finance. If you are ambitious, tech SWE is a bad deal.

The tech billionaires are far richer than quant finance billionaires. And I would bet that tech SWE has a far higher probability of launching you into $10M+ range than quant finance. I don’t know that a few more single digit billionaires (if that is even true) puts quant finance ahead of tech SWE in terms of potential rewards for the “ambitious”. Also, quality of life is far better for tech SWE.

> And I would bet that tech SWE has a far higher probability of launching you into $10M+ range than quant finance

$1B net worth? Google has more SWEs than the entire quant finance industry globally. Yet Google could only produce what, 4 billionaires?

$10M TC at Google? That’s at most 500 VPs out of 150,000 employees. That’s 0.3%. Not good odds. More than 7 people (0.3% x 2500) at Jane Street are making $10M+…

Same logic applies to $1M TC. Tech has okay chances, but quant is simply multiples better. Only if you got lucky at Tesla or NVIDIA. Otherwise your L5-E5 comp maxes at 600-800k including RSU appreciation.

Then for junior/new grad, quant firms win again. 300-500k quant SWE offers vs 200-300k in tech.

Hell, even for summer internships, quant trading firms pay SWE interns $20-25k/month. Also on levels.fyi

Re: Takeaways from the Jane Street bond prospectus

#249

Post by Scoundreller »

__oh_es wrote: post #141
paxys wrote: post #112

Earlier quoted context omitted.

Typically at such companies you have to be at the very top of the hierarchy to be able to buy in and get a slice of the profits. It is very unlikely that rank and file employees are able to participate, at least at a scale larger than, say, a Google employee buying some extra shares.

$100k buy in at the hedgefund I know. Its a big figure for most but starting salaries, friends & family, and personal loans will get you there. >20% return is quite easy to justify. You're also looking at a 50%-200% annual bonus, mostly leaning to the higher end of the range. Its a very different world!

Big Canadian bank I know had something like a requirement to own $450k of shares to be a board member. But they sliding scale exempted you for your first 5 years and gave you $90k in shares each year, so as long as number go up, there was no actual outlay.

Re: Takeaways from the Jane Street bond prospectus

#250

Post by CooCooCaCha »

tasuki wrote: post #199
CooCooCaCha wrote: post #150

Earlier quoted context omitted.

I hate, so much, when people refer to jobs as voluntary cooperation. Maybe at the very top when you have more money than you’ll ever need, but for the vast majority of people jobs aren’t truly voluntary.

You won't enjoy my comment then :) Yes, jobs are voluntary. The vast majority of people could choose not to have a job and not to entertain certain luxuries in life like having a roof over one's head or food on the table. Some even (voluntarily!) choose not to have a roof over their head because they don't like the idea of having a job.

You’re right, I don’t like your comment. It always amazes me how heartless you libertarian types can be.

Food and a roof are basics, not a luxury. The fact that a significant number of people in this world don’t have those things speaks more to our failure to provide.

Do better.

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