Like all models they base decisions based on data, theories, assumptions, analyses, hypotheses/etc within methodological frameworks.. I would not be able to discuss the specifics, but please feel free to PM me if you have any question/comment that I could answer or discuss. Thanks for your polite and thoughtful post.
ES Journal - 2014
- Thread starter murica
- Start date
Like all models they base decisions based on data, theories, assumptions, analyses, hypotheses/etc within methodological frameworks.. I would not be able to discuss the specifics, but please feel free to PM me if you have any question/comment that I could answer or discuss. Thanks for your polite and thoughtful post.
The good thing with ET is when I read your post, I thought the complete opposite.
Talent in trading is important for those who live exclusively from their trading.
May be not for hedge funds where the key is gaining investors ( management fees), and definitively not for investment banks where a good chunk of profits is made from services ( merger and acquisions, advising governments on loans ( a gvt can borrow hundreds of billions and a %tge of this is significant profit). And government can lend billions in corporate welfare operations - there banks services are neede and the fees they earn can be substantial.
And as evidence that talent is not a "given" : traders in institutions still feel the need for insider trading, otherwise they can't really make it.
There is actually not as much talent in trading as one would think : first how does one know if it is not a lucky winning streak before blow ups come in?
If the talent was there, how comes veteran blow up?
If the talent side was easy, how comes even well capitalized firms like Maddoff's one could not find them that easily and went the ponzi way?
Now, with compounding : anybody who truely has the trading gift can make it big.
The leveraged and small trader makes a big deal of it, because he eats what he extracts from the market. No salary, no benefits, etc...
Have you ever traded your own account ? and lived solely from your trading?
How long did you last IF you had?
You make a number of good points. The question of timing is a must for the small trader because he has not only to be a winner, but he to be a big winner, do it consistently, and do it with leverage. He has only a comparative break on liquidity (even that one is not a sure thing). So the small traders probably does the most difficult trading job in the world.
The idea of searching for talent could be appealing to the investors, but it could be met if one were hire from top schools (investors would see that as talent independent of trading performance). If the search for talent was really critical, you would see them do it like the search baseball players. In addition, if a bank has a big line of credit for trading, the question of timing is irrelevant in my view. I see lack of liquidity as the real problem, not the timing.
Actually banks did go the talent scouting route - including at one time, apparently :
* Goldman was hiring the best mathematicians they could find in the former URSS.
* another one was going after the best pilots
etc,,,
all these resulted in similar success rates , the 3%.
Putting your hand on a good trader, is like finding an olympic gold winner.
The fact they scout for the top school - in my view - explains more what they are looking for ( including the ability of insider trading with discretion - easier if uncle is CEO of a multinationale, etc... ). Spoofing with HFT is easier to get done with a team of well educated computer scientists ( Stanford, Berkley, MIT, etc...).
No wonder they know that a sure thing is insider trading - as long as financial fines are reasonables!.
Even in Richard Dennis experiment, many dropped out during the experiment.
* Goldman was hiring the best mathematicians they could find in the former URSS.
* another one was going after the best pilots
etc,,,
all these resulted in similar success rates , the 3%.
Putting your hand on a good trader, is like finding an olympic gold winner.
The fact they scout for the top school - in my view - explains more what they are looking for ( including the ability of insider trading with discretion - easier if uncle is CEO of a multinationale, etc... ). Spoofing with HFT is easier to get done with a team of well educated computer scientists ( Stanford, Berkley, MIT, etc...).
No wonder they know that a sure thing is insider trading - as long as financial fines are reasonables!.
Even in Richard Dennis experiment, many dropped out during the experiment.
But then , even banks know that profitable trading is worth it. 
Specially when now they saw investors like Buffet lending them money!
Soros is another matter - crippling the bank of England must have sent
a cold to all the banks at the time.
Specially when now they saw investors like Buffet lending them money!
Soros is another matter - crippling the bank of England must have sent
a cold to all the banks at the time.
good add!