Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How I Became a Quant (2007) [pdf]

engineering.nyu.edu

Post reply on HN
Print view View original

71–80 of 89 posts

Re: How I Became a Quant (2007) [pdf]

#71

Post by frankc »

altmanaltman wrote: post #47
mhh__ wrote: post #32

Earlier quoted context omitted.

What kind of quant? Trading huge equity portfolios and getting paid a lot? Pretty fun Pricing structured products all day in a bank that charges you for lunch? Not great

I don't think quants actually trade, though? Like the division of labor usually separates research, code, and trading. Unless you start your own sole prop quant trading shop, which is fun but unless you're the next Jim Simons it can be pretty hard to do it profitably.

if you are doing equity statarb, its all low touch strategies, so yes the quants 'trade' in that they can write the strategies. The traders in that environment are more like support, usually.

Re: How I Became a Quant (2007) [pdf]

#72

Post by quanttnauq »

neko_ranger wrote: post #10

I wonder how fun being a modern quant really is. It seems like one of those things that sounds more fun in your head, but the reality is different. Kinda like "studying physics", going pro in a sport, or becoming a rockstar. People see the end result and don't see how much work it takes to get there or what the day to day is really like

[dead]

Re: How I Became a Quant (2007) [pdf]

#73

Post by gosub100 »

KellyCriterion wrote: post #62
gosub100 wrote: post #37

Earlier quoted context omitted.

and I wonder how much of your success / failure is luck vs advanced-anything. You could wager 7-figure bankrolls in vegas on blackjack or baccarat and _possibly_ double or triple it. Doesn't mean your equation-solving had anything to do with it (in fact it expressly doesn't in that case).

Strictly wrong: - a casino is a random game - stock market is a game of incomplete informatoin The one cant related to the other by whatever equation.

The series of a shuffle of a 6-deck shoe is not "incomplete information"?

Re: How I Became a Quant (2007) [pdf]

#74

Post by fancyfredbot »

lordnacho wrote: post #67
fancyfredbot wrote: post #38

Earlier quoted context omitted.

The salesman can't tell you how to hedge the product. If you can't hedge you will lose that 5% upfront pretty fast. You need quants and sales and trading. Which is why all banks have all three.

> The salesman can't tell you how to hedge the product. If you can't hedge you will lose that 5% upfront pretty fast. > You need quants and sales and trading. Which is why all banks have all three. I don't think anybody said you can just run without one of those. But it seems the magic is in spotting the fish, not hauling it in.

Spotting fish who you can overcharge is not really a sustainable business model. You can do it once but your colleagues will find out, move to a competitor, and next time they'll rip them off a bit less than you did and you'll have to rip them off less than that.

There is, eventually, a shortage of dumb money. The sustainable way of making money involves competition, and this involves knowing the "right" price within a tight tolerance.

Re: How I Became a Quant (2007) [pdf]

#75

Post by mikrl »

gosub100 wrote: post #73
KellyCriterion wrote: post #62

Earlier quoted context omitted.

Strictly wrong: - a casino is a random game - stock market is a game of incomplete informatoin The one cant related to the other by whatever equation.

The series of a shuffle of a 6-deck shoe is not "incomplete information"?

Taleb calls it the Ludic Fallacy (game fallacy)

The statistics of games are understandable, defined and easy to work with.

The statistics of markets, as Soros spent his career investigating, are filled with feedback loops, and as Taleb investigated, fat tails.

Re: How I Became a Quant (2007) [pdf]

#76

Post by antonvs »

postflopclarity wrote: post #53
nzzn wrote: post #43

Earlier quoted context omitted.

If you’re only make on average 500k/year after 10y — you’re not really in the game at all

there are a lot of quants who aren't at T1 firms or in the hottest seats. plenty make less than this. obviously if you are top of class and getting headhunted by XTX, your offers will be much bigger than $500k ... but it's kind of obnoxious to claim that QRs making less than this aren't even players

The term "player" tends to imply something more than just someone employed in a field. I don't support all this insane inequality, but the other commenter is not wrong on the relative value assessment.

Re: How I Became a Quant (2007) [pdf]

#77

Post by antonvs »

IrishTechie wrote: post #45
darth_aardvark wrote: post #36

Earlier quoted context omitted.

I get your point, but that was the exact logic of Effective Altruism and Sam Altman is now jailed for the Largest Fraud of All Time. It's a slippery slope.

Sam Bankman-Fried. And I think he’s a bit of a special case, others do not need to be worried they’ll succumb to multi billion dollar fraud schemes if they try to earn-to-give.

I'm not defending SBF, but I think you may not be completely taking into account how strong the pressures are on someone like that. I'm pretty sure he didn't set out to commit a multi-billion dollar fraud, he was sucked into it as a consequence of the expectations on him and so forth. My point here is just that this is a symptom of a societal problem, and SBF is just a well-positioned scapegoat.

Re: How I Became a Quant (2007) [pdf]

#78

Post by DontchaKnowit »

keiferski wrote: post #29
nrclark wrote: post #19

Kind of reads 25 people's stories about "How I became a parasite". Why not create new things, instead of making a career out of leeching the wealth created by others?

This isn’t really a good angle to critique finance IMO, because it is indeed a necessary part of the modern economy. A better angle is how finance tends to acquire a ton of smart young people that could/would otherwise be doing work that has more benefits to society. It’s hard to blame the individual here, because the salaries are orders of magnitude larger in finance vs. say, aerospace engineering. Would I turn down…

How is that not a restatement of what OP said?

Re: How I Became a Quant (2007) [pdf]

#79

Post by Smaug123 »

antonvs wrote: post #77
IrishTechie wrote: post #45

Earlier quoted context omitted.

Sam Bankman-Fried. And I think he’s a bit of a special case, others do not need to be worried they’ll succumb to multi billion dollar fraud schemes if they try to earn-to-give.

I'm not defending SBF, but I think you may not be completely taking into account how strong the pressures are on someone like that. I'm pretty sure he didn't set out to commit a multi-billion dollar fraud, he was sucked into it as a consequence of the expectations on him and so forth. My point here is just that this is a symptom of a societal problem, and SBF is just a well-positioned scapegoat.

SBF was really unusual in that he claimed to be a pure expected-utility maximiser. He admitted that he would take 51% coin-flips forever on Conversations with Tyler in March 2022, long before everything blew up:

> COWEN: Then you keep on playing the game. So, what's the chance we're left with anything? Don't I just St. Petersburg paradox you into nonexistence?

> BANKMAN-FRIED: Well, not necessarily. Maybe you St. Petersburg paradox into an enormously valuable existence. That's the other option.

I'm not saying the pressures are absent, but they are hopefully vastly less compelling for any normal person with a more standard view of risk and utility. ("Sure, I'll just cover up this little bit of fraud, because that's got a better than 50% chance of success" is a course of action SBF all but said he would take, months in advance!)

Re: How I Became a Quant (2007) [pdf]

#80

Post by fragmede »

antonvs wrote: post #77
IrishTechie wrote: post #45

Earlier quoted context omitted.

Sam Bankman-Fried. And I think he’s a bit of a special case, others do not need to be worried they’ll succumb to multi billion dollar fraud schemes if they try to earn-to-give.

I'm not defending SBF, but I think you may not be completely taking into account how strong the pressures are on someone like that. I'm pretty sure he didn't set out to commit a multi-billion dollar fraud, he was sucked into it as a consequence of the expectations on him and so forth. My point here is just that this is a symptom of a societal problem, and SBF is just a well-positioned scapegoat.

If you have a billion dollars to give me, I'm pretty sure I can manage to not to use them for outright crypto fraud. You'd have to give me a billion dollars to be sure, but I promise really hard.
Post reply on HN