PhD without the guts

Andre · Jan 16, 2003

Trading can be taught and can be mastered. I see no reason why a Ph.D. could not master it if he or she wanted to.

::shrugs::

I didn't say it couldn't be taught and I wasn't talking in absolutes. Sure, a Ph. D. can trade. My Dad has a Ph. D. and he daytraded for a year, making money too.

I do think one gets conditioned. I've certain been conditioned to the long term buy and hold mentality. I'm only just able to view stocks as short term, ie: not getting attached to them.

I've read about and spoke to traders and coaches who work with many varied people, these lead to my comments on educated people and how they often need to be right, which in leads to an incompatibilty to making money actively trading. I'll dig up some sources if you like.

AndrÃ©

daniel_m · Jan 16, 2003

Quote from momoNY:

Have you ever asked the question, what if you went to Harvard with those suckers? You would probably have done better than them; and I doubt that a degree from Harvard would diminish your ability in trading! All what I want to say is that, a degree in college wont hurt your trading success, it will rather help you mainly if you are using TA. I don't see how a street kid can learn TA and interpret them accurately!

Amomo.

all i can say to that is:

La hauteur de la voix compense la faiblesse de l'argument.

momoNY · Jan 17, 2003

Quote from wally_:

I totally disagree.

It's just like saying they cannot understand their shortcomings. They can and if they want to, they can become good traders. Intelligence can only help in trading, but it is not enough to be a good trader. Other things are more important. That's why this thread is simply silly. Ph.D. or not, you still need to master trading. Ph.D. does not give you any advantage in trading, it's as simple as that. However saying that it is some sort of obstruction is also ridiculous. It simply has nothing to do with trading the same way as having a pair of blue eyes has nothing to do with how well you can trade.

Trading can be taught and can be mastered. I see no reason why a Ph.D. could not master it if he or she wanted to. But most do not want to just as most other people prefer doing things other than trading.

I Almost agree on everything you said exception made to having a Ph.D. does not help you trading. Having a Ph.D. (or any college degree by the way) helps you a lot in becoming a good trader.
The silliest thing however, would be to say that you can take a street kid and teach him to trade and he will become a good trader. A street kid that could grasp trading technics, would never be a "street" kid, this is just common sense (which, I agree, is not common ...).
Let's just ask one question: any street kids on this forum?

Amomo.

svsv · Jan 17, 2003

I guess money can not buy you a Ph.D :-)

Whatever successful trader you are, you can not put that in your business card :-)

Why can't you be happy that you are successful traders and let poor Ph.D's alone?

momoNY · Jan 17, 2003

Quote from daniel_m:

all i can say to that is:

La hauteur de la voix compense la faiblesse de l'argument.

You got it right, that's why I was not speaking loudly.

Amomo

cheeks · Jan 17, 2003

Quote from momoNY:

I Almost agree on everything you said exception made to having a Ph.D. does not help you trading. Having a Ph.D. (or any college degree by the way) helps you a lot in becoming a good trader.
The silliest thing however, would be to say that you can take a street kid and teach him to trade and he will become a good trader. A street kid that could grasp trading technics, would never be a "street" kid, this is just common sense (which, I agree, is not common ...).
Let's just ask one question: any street kids on this forum?

Amomo.

You two are starting to sound like Randolf and Mortemer(sp?).

Spark · Jan 18, 2003

what proportion of market makers in NYSE or CBOT floors hold Ph.D., Masters, Bachelors,High School degrees, or high school drop outs! just curious. ....

omcate · Jan 18, 2003

Quote from Spark:

what proportion of market makers in NYSE or CBOT floors hold Ph.D., Masters, Bachelors,High School degrees, or high school drop outs! just curious. ....

Most of my Ph. D. schoolmates, who have worked at Wall Street, have become mutual fund managers or traders of hedge funds. None of them is market maker.

vladiator · Jan 19, 2003

Quote from Spark:

what proportion of market makers in NYSE or CBOT floors hold Ph.D., Masters, Bachelors,High School degrees, or high school drop outs! just curious. ....

This thread is silly. I'm in the last semester of my PhD and am running a hedge fund based on the reseach I'm working on. the latter is a direct product of the former. If PhDs decide not to trade it's not b/c they don't have guts. It's b/c they are smart enough to realize how hard it is and that unless you do have some trading strategy that can be traded on, it's best to stay out. Many "street kids" will not have the same approach and will at best concoct some "strategy" that seems to have positive returns without the skills to do rigorous tests you learn in a PhD program that would show the strategy is gonna reallocate your capital to others

As for the question above, I think a better question would be "what proportion of those who formulate the strategies and techniques used by MMs etc hold PhDs. You don't have to have the best education to execute something. But to come up with it, it is vital. Yes, a high school drop out can trade, b/c he can click and punch keys. Provided someone told him when and why to do it. A PhD is the best investment one can make. But then again, my opinings are certainly not unbiased

buzzy2 · Jan 20, 2003

If you go to an investment bank most economics/finance phd's are either in "research" or sales. Few of them actually trade. They generally have good sales skills thanks to their training, they can invent a reason to virtually anything while sounding convincing, keeping a straight face and kissing your a#$, all at the same time. Not anyone can pull that off believe me.
Quantitative phd's on the other hand generally lack people skills and couldn't sell a superbowl ticket for a couple of bucks on ebay. So they are basically programmers and number crunchers.
Very very few phds end up as *successful* traders or hedge fund managers even among those who try. I've seen lots of phds even college professors, in mutual/hedge funds doing nothing but embellishing the fund's brochure presumably to make it respectable and therefore, more marketable. The fund doesn't actually trade following the phds research (they know they would go broke if they did it).
Some of those phds do just "big picture" research, not directly usable for trading, but gives the traders/managers confidence in the "general" composition of the portfolio.
But, I've also seen many phd's working in funds actually producing valuable and profitable trading strategies, but they are unable to trade themselves, some of them because they have no guts, but others because they don't have enough money, did they spend it all in graduate school?. But anyway, you need a LOT of money to trade OTC fixed income, for example.
Profitable, long-lived, self-reliant, non-wage earners, phd traders are very very few.