The New Math: Quantitative hedge funds are pressing into new realms of science
- Thread starter makloda
- Start date
I think that the moral hazard associated with gaming a system that allows you to share in the gains but not the losses will always be irresistible to a certain element. Regulation may reduce irresponsible behavior, but it is unlikely to ever eliminate it. True, the leverage some of these guys use is unbelievable, especially in the face of the complexity they engage in. However, for all their "science" I have no doubt that they knew full well that they were taking a flyer on someone else's dime. Unfortunately, there will always be such sociopaths.
Isn't it about time people stopped heaping all this praise on these quants.From the article I'm feeling they're not doing too well and when it goes wrong for them it goes pretty badly wrong,but what the hell,it's usually someone else's money they're playing with anyway.
Honestly,they're referred to like they're deity.They're just a bunch of time-wasters.
Good point. Anyone can floor an accelerator on a straight course. It's the curves and turns that identify an accomplished driver. And that's precisely where these guys often seem to find themselves in a flaming heap. And, not surprisingly, it's not their car.
The Quant era began around the mid 80's and ended around June, 2006.
Naturally, it took until EOY 2007 to get together a plan to find out what went wrong and why no one had anything to substitute for what wrong.
What is going to move the financial industry forward is a different sales tool than the Quant Image.
The motto's of people like E. F. Schumacher (Small Is Beautiful) and Buckminster Fuller (Doing More with Less) will prevail. It will become known, in the years ahead, as Qual which is based upon effectiveness, efficiency and optimization.
Quant was biggering as shown in The Lorax by Dr Seuss.
Drilling down to the essentials comes down to pool extraction which means increasing one's share of the capital pools which operate the global economy. As one regards the distribution of billionaires on the world it is easy to see that quality rules rather than, as of old, quantity.
Quality is defined as ANY market, ANY fractal and ALL the time. This is what pool extraction means; pool extraction is the template.
Unfortunately the quants have built a mind set that suggests that they are, at long last, going to put it all together. They in fact are just pouring money down a rat hole by doing the usual induction which is against the rules as any truck driver, ship's pilot (the guy hired in close waters), airship's pilot knows.
The government, politicians and egulators are going to step in and shape up the quant reminants and their managers and administrators for the express purpose of protecting the public.
The Quals, on the other hand, will become known as the standard for moving the global economy forward.
It is a good thing to live through eras coming and going; it is how one learns to define excesses in systems. Tooling does not run any show; policy and planning is what gets the job done. Quality always rules quantity.
The market always offers; the qualitative rules are:
1. Be in the market,
2. Be on the right side of the market, and
3. Operate at the capacity of the market.
What were the Quant rules?
There is a big difference and quant has gone the way of the three choices, once the keystone of financial planning. Remember those?
How many cylinders in your car? How many capacitors?
Naturally, it took until EOY 2007 to get together a plan to find out what went wrong and why no one had anything to substitute for what wrong.
What is going to move the financial industry forward is a different sales tool than the Quant Image.
The motto's of people like E. F. Schumacher (Small Is Beautiful) and Buckminster Fuller (Doing More with Less) will prevail. It will become known, in the years ahead, as Qual which is based upon effectiveness, efficiency and optimization.
Quant was biggering as shown in The Lorax by Dr Seuss.
Drilling down to the essentials comes down to pool extraction which means increasing one's share of the capital pools which operate the global economy. As one regards the distribution of billionaires on the world it is easy to see that quality rules rather than, as of old, quantity.
Quality is defined as ANY market, ANY fractal and ALL the time. This is what pool extraction means; pool extraction is the template.
Unfortunately the quants have built a mind set that suggests that they are, at long last, going to put it all together. They in fact are just pouring money down a rat hole by doing the usual induction which is against the rules as any truck driver, ship's pilot (the guy hired in close waters), airship's pilot knows.
The government, politicians and egulators are going to step in and shape up the quant reminants and their managers and administrators for the express purpose of protecting the public.
The Quals, on the other hand, will become known as the standard for moving the global economy forward.
It is a good thing to live through eras coming and going; it is how one learns to define excesses in systems. Tooling does not run any show; policy and planning is what gets the job done. Quality always rules quantity.
The market always offers; the qualitative rules are:
1. Be in the market,
2. Be on the right side of the market, and
3. Operate at the capacity of the market.
What were the Quant rules?
There is a big difference and quant has gone the way of the three choices, once the keystone of financial planning. Remember those?
How many cylinders in your car? How many capacitors?
Are the top 10 quant funds doing any better than the top 10 non-quant funds ?
That's extremely accurate. As I have said before, anyone can hit a fastball if all you see are fastballs. Curve ball is what the major leagues are all about, and you have to mix your ratio of each in some strategic way as a pitcher to keep hitters off balance. The markets are pitchers, traders are hitters.
Almost all of science is linear. But we are getting better at non-linear models. Part of the problem is an axiom of mathematics: The more we "squeeze" a function in the time domain, the more it spreads out in the frequency domain, and vice versa. This is known as the Fourier Transform in mathematics, and the Heisenberg Uncertainty Principle in sub-nuclear Physics. Almost certainly there is some similar principle in high frequency trading.
Traders "solve" this problem by "acting" in a holographic way at multiple time frames. You can do this because markets aren't instantly correcting. Stay tuned.
nitro
You sound like someone with a scientific background..?!