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Understanding Jane Street

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Re: Understanding Jane Street

#311

Post by mabbo »

baby wrote: post #248
mabbo wrote: post #216

Earlier quoted context omitted.

> People who are driven and smart don't suddenly earn their first $5m go off and buy an annuity I guess I must not be driven, because I would. Or at least something close enough to that. $5m just earning interest at 5%ish is way more income than I need to live the lifestyle I want. I'd buy a few acres in the middle of no where, build a nice house, grow a big garden, raise my daughter as a nice family man and never wo…

The thing is, if you end up in a job that pays this well it’s because you’re either very lucky (and congrats to you) or you’re very passionate. If you’re in the latter category why would you retire when you’re being paid to do what you love?

> it’s because you’re either very lucky (and congrats to you) or you’re very passionate.

It's never because you're very passionate. Passion has basically no correlation with financial success. Millions of passionate artists, musicians, writers, and all of them broke as can be, most working shit jobs to pay the bills wishing they could just be passionate and make money from that. Passion is bullshit.

The real path to financial success is a combination of: being born to parents with the means and motivation to see you well education; being born lucky enough to be a little bit clever; being lucky to pick a career that makes a lot of money, often only by ignoring idiots who say 'follow your passion; putting in a lot of hard work to get good at something that is in-demand.

Or the usual answer: just being born wealthy and wouldn't-you-know-it you wound up wealthy too.

Re: Understanding Jane Street

#312

Post by carpfire »

runevault wrote: post #257
bitcharmer wrote: post #244

Earlier quoted context omitted.

I'm struggling to understand how OCaml reduces the risk of bad hires and other languages don't.

Languages large swaths of the industry know (Java, C#, JS, Python, etc) include a subset of people who learned it purely for the job opportunities but aren't competent developers. The number of people who learn more niche languages like an ML or Haskell has a far lower % of people of that type. An example of a language that I could see shifting from one to the other pretty soon is Rust now that it could be a way in t…

While this may be true, JS explicitly says they don’t expect you to come in knowing Ocaml. So the filtering hypothesis doesn’t really hold.

Re: Understanding Jane Street

#313

Post by kyawzazaw »

bitcharmer wrote: post #265
runevault wrote: post #257

Earlier quoted context omitted.

Languages large swaths of the industry know (Java, C#, JS, Python, etc) include a subset of people who learned it purely for the job opportunities but aren't competent developers. The number of people who learn more niche languages like an ML or Haskell has a far lower % of people of that type. An example of a language that I could see shifting from one to the other pretty soon is Rust now that it could be a way in t…

I agree with this to some extent. However in case of firms like Jane or Citadel or Quadrature you have to have a well documented, long track record of accomplishments in various orgs before your CV lands on their desks. These companies hire from a different pool than you described.

I don't know if that is true. As a new grad, I got invited to interview for Point72, Headlands Tech, HRT, Two Sigma. (although some of these are in a different "tier", and different business than Jane Street or Citadel).

I definitely didn't have more special accomplishments than 2 typical internships and both were not FAANG.

Re: Understanding Jane Street

#314

Post by mooreds »

FabHK wrote: post #231
JackFr wrote: post #212

Earlier quoted context omitted.

Michael Lewis is a great writer, but the closer you are to the subject the more his shortcomings are exposed. I felt the same way about The Big Short and to some extent Liar’s Poker. He has an annoying tendency to assume that if he doesn’t understand something, either it’s completely inscrutable to everyone or simply BS. (And to pile on, The Blind Side was the touching story of how Lewis’s prep school classmate, an O…

While I agree that Flash Boys was below par, what's wrong with The Big Short? I thought that was well done, accessible, and largely accurate.

I liked The Big Short.

On a different but related note, I also really enjoyed the Compleat Ubernerd, written by Tanta, all about mortgage servicing in the mid 2000s: https://www.calculatedriskblog.com/2007/07/compleat-ubernerd...

I'm not sure how it has aged (no Dodd-Frank updates, the author has passed away) but it was glorious in its time.

Re: Understanding Jane Street

#315

Post by kyawzazaw »

pinerd3 wrote: post #169
mellavora wrote: post #163

Earlier quoted context omitted.

> as if you can jump into a field without spending 10-20 years of learning and do cutting-edge research. I know multiple people who have done this. If you want a famous person, look at Paul Erdős. Always jumping into new areas of mathematics and solving problems at the cutting edge. Or, to get to the current subject, Taleb using his background as a trader to jump to a career in academia, where many consider(ed) his r…

I agree that a smart, ambitious person can become expert in more than one field in their life — but jumping to a new area of mathematics is on an entirely lower level than jumping from algorithmic finance to cutting edge biomedical, especially at the time Erdős was working.

There are a few people who did a complete switch to study rare diseases with no background.

Sonia Vallabh, and her husband, Eric Minikel are the strongest examples of these type of highly smart and ambitious people.

> Sonia Vallabh ... had just graduated from Harvard Law School.

> [Eric Minikel] ... had recently gotten a degree in urban planning from M.I.T

https://www.broadinstitute.org/bios/sonia-vallabh

https://www.broadinstitute.org/bios/eric-minikel

https://www.nytimes.com/2020/07/07/health/rare-diseases.html

Re: Understanding Jane Street

#316

Post by matred »

viet1 wrote: post #119
ReggieCommaRose wrote: post #13

Earlier quoted context omitted.

Usually too smart, on rare occasion they cheat. MMs inherently deal with information assymetry and adverse selection because they generally stand ready providing liquidity with quotes out in the world (though obviously width matters). Toxic counterparties are parties who decide to trade against you who have a better idea about “true” price than you. They might make or they might not, depends if the degree in which th…

or doing latency arbitrage

that falls into the category of knowing the “true” price better than you do

Re: Understanding Jane Street

#317

Post by j7ake »

mattkrause wrote: post #310
j7ake wrote: post #141

Earlier quoted context omitted.

Yeah you’re right. My point is that the technical bar for entry is low, and can be attained maybe by spending one year in a top lab. You then skip the hazing ritual that is the PhD and postdoc and directly start your own small lab. Spend your money attending conferences to make connections and get yourself updated in the field. Hire technicians to help with your grunt work. Spend your days reading research papers, di…

The bar for doing some experiments, in an environment with tons of logistical, technical, and intellectual support, is indeed pretty low. A high school student could certainly learn to run a gel in a week or two; patching a neuron might take a few months.However, the physical "act" of collecting data, especially in the happy case where all of the conditions have been worked out and the results look "as expected", is…

Long postdocs are a modern phenomenon due to the oversupply of biomedical researchers. Historically people did shorter PhDs and skipped postdocs. There are stories of old timers saying they got their faculty position based on just one or two papers, unthinkable these days.

If you’re independently wealthy, you don’t need to go through the modem hazing ritual and you can start your own lab much earlier.

I’m not saying you can start immediately and be an effective researcher, you will initially suck like everyone else. But you will have a better time learning how to fail if your career/livelihood is not on the line.

Re: Understanding Jane Street

#318

Post by kyawzazaw »

cosmic_quanta wrote: post #277
Orochikaku wrote: post #146

Signals and Threads[0] is a podcast featuring interesting conversations from engineers at Jane Street [0] https://signalsandthreads.com/

Thank you for the suggestion. Looks like it's doesn't get published often though

Yaron Minksy is probably too busy.

But the tech blog is really good too.

https://blog.janestreet.com/

Re: Understanding Jane Street

#319

Post by keiferski »

Ekaros wrote: post #219
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…

I think there is also a big question of what sort of spending habits these people have acquired. Their peers are making lot of money. And I doubt everyone is extremely frugal. Margin Call I think gave pretty good example how some in other firms might be spending their income. Stepping down and just starting to live on annuity might not fit to what they have come to expect.

The relevant scene: https://youtu.be/xW1CrQu_H6E

Great film.

Re: Understanding Jane Street

#320

Post by matred »

pedrocr wrote: post #235

There's one thing that always baffles me about this kind of market work. Let's for the sake of argument assume that HFT and other sophisticated market making activities are crucial for price discovery and other great social benefits. Then why does this amazingly important social good get mostly turned off over 80% of the time[1]? Even as a retail buy-and-hold investor in boring ETFs not being able to trade outside no…

The majority of the market, by flow, is open 23H a day during the week, and opens Sunday evening.
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