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Thank you, this is an awesome quote! I am going to frame this and put it on my wall next to the "Buy Low, Sell High" painting.

Out of curiosity, is there a good free (or cheap) source for corporate action data (splits/divs/takovers)?

No, it is not. There are plenty of ways banks generate trading p&l, some of them are based on balance sheet, and some on customer flows, some on beta positioning, on structured products. Some are based on actual "trading" as you call it - there are true alpha trades out there that are only...

Could you give me an exact reference, pls? I am trying to recall if I have ever seen this paper. Special undestanding of the trading performance is most certainly nessesary - risk-adjusted returns is the first and foremost source of misunderstanding of the trading performance. In general...

Buffet does not practice "buy and hold", his strategy is "buy and manage". There is a big difference between a passive investor and a true stakeholder.

You underestimate the impact of ego on the business. Most managing director-level traders at a bank think that they have a special insight and can make money by simply punting futures. That's the nature of the business - ego, not skill, is what gets you promoted. Unfortunately, it seems that...

Perfect. Now we have a hypothesis - "all institutional alpha is generated via inside information". Do you feel that your hypothesis agrees with the fact that there are consistently profitable interest rates traders (widely traded non-information sensitive instruments) or HFT (timescale is...

Again, true and false. The true part is that there are practically no companies that remained the "pillars of the market" over the last 100 year. It's the way of the world, companies rise and fall. Any person that would buy Facebook today and hold it for the next 30 years is an idiot. Now...

Once you are disconnected from the flow information and do not have an unlimited balance sheet to adsorb short-term fluctuations in your P&L, it's much harder to make money. Some of these people adopt, some would not.

I would recon Jan vols would be 40 - 50 percent.

You are oversimplifying things, in my opinion. While the terminal payoff is the same, there is also margin treatment, tax treatment that are very different for the two. I can imagine scenarios, especially for retail traders where CC is preferable to a pure options position. PS. Using puts...

Kahnemans prospect theory is a great contribution to behavioral economics and gives you great insight (an alternative one, too) into the concept of risk premium. But once you past that, you realize that the research of a Nobel prize winner is no different then any other scientific paper. I...

(1) You can make money selling options or you can make money buying options (i mean "net risk premium"). First one is easier, second one is safer. Selling one is perfectly suitable for private investor/trader under assumption that (a) you are not as concerned about short-term fluctuations in...

There are so many statistical and fundamental issues with that research, I would not even go there. For starters, while evaluating any performance vs the market, it's worth looking at risk adjusted returns, which he did not. Personally, I think he has fallen a long way since his Nobel-prize...

In January of 2009, a British buddy of mine went to yet another bachelor party in Lithuania and said that the the prices for whores and strippers are way down and that it is indicative of the dire state of the economy. I said that we should start publishing a composite index tracking these...

So you are like me, you equally hate everyone?

Well, as my old boss used to say (may he rest in peace), "it's either a death of thousand cuts or a bullet to the head". I disagree about guessing. Obviously, every trade is up to God. But as you build better models and understand the flows better, God helps you more.

This is the best tribute to survivorship bias I've ever seen. In any case, in reality the line between a trader and a PM is often blurred, as man PMs do their own execution these days.

Sounds odd. $50 strike can't be worth anything on that tenor, so he's just buying $30 strike puts. Are you sure you got the right strikes or the tenors? Plus, I can't see anyone sane on the street doing a collar like this on such a short tenor.

I don't think my juniors are smarter, but they are certainly more educated then an average trader 15 years ago. There is a tendency to hire more numerical/programming oriented guys from good schools. So it's consistent with the new trend - either you are "the shit" (i.e. people compete for...