"Trading as a Business" quant interview, highly recommended

Quote from TraderZones:
I made $5K that day, by loading up on mutual funds at EOD prices. I figured it was a serious overreaction, and I cashed in.

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Quote from agpilot:
To TraderZone: I think your lying. Almost no body could get their orders filled that day. Big Fido quit answering their phones early that morning......... Post a copy of your P/L for "loading up" ... A whole $5k? Your big wad musta shook the market..
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You cannot be serious; did you study investing by reading comic books? - anyone going long had their pick. It was the shorts who were desparate. Seriously...

Tell you what. We will both put $5,000.00 (US currency, not your monopoly money) into escrow. I will then take a polygraph test. Simple rule If I fail on that claim, you get the money. If I pass, I get the money. PM me and let me know...

And you think a $5,000.00 couple-day profit in 1987 dollars is small potatoes? You seriously need to get your head out of your paper trading accounts and learn what real currency looks like.
 
Quote from asiaprop:

You cannot model rare events nor can someone with whatever amount of work experience predict rare events
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We know all this . .. Again, what's your point? What's the point of everything you've been saying here?

Right , psychology . .. Nothing new . .. What else? Quite frankly, I just don's see what exactly you're trying to say!
 
Here's a good read:

Three cheers for the death of old economics
by Anatole Kaletsky

http://www.timesonline.co.uk/tol/comment/columnists/anatole_kaletsky/article6892820.ece

"The orthodox mathematical model took no account of reality.

. . .

Nobody seemed to notice that all this mathematical flummery left out the most crucial step of true science. Physics, chemistry and biology use mathematical models to draw conclusions that are then tested against reality. If reality contradicts these tests, then scientists reject the models. Today’s academic economics reverses this process: if models disagree with reality, it is reality that economists want to change."
 
Kaletsky is occasionally worth listening to... However, this article of his is one of those cases where, in my view, he is talking bullsh1t.
 
If you still did not get my point then maybe its you who has an issue not me. Ever thought of that?

Last hint: Leave out science and quant research, they really have no place nor are they responsible for anything in financial trading. I have come across pretty much every quant writeup of every major bank and have not found value in it a single time. It makes me shiver when a quant tries to tell me to trade a vol spread between two completely uncorrelated underliers simply because it has blown out vs its historical range. (example, SPX vs Taiwan Index vars spread)

My point all along was that quants help to create and maintain models to price derivatives. Thats all, not more, not less. How much risk is taken is solely determined by the trader/trading desk. A discussion to find responsibility in the quant crowd for anything related to this blowup is nonsense. Which part did you still not understand about my point?

Quote from HiddenAgenda:

We know all this . .. Again, what's your point? What's the point of everything you've been saying here?

Right , psychology . .. Nothing new . .. What else? Quite frankly, I just don's see what exactly you're trying to say!
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Guys a joke. My old man has two masters degrees one in physics and another in materials science(metallurgy) as is 10x smarter than that clown. That guy is full of himself.
 
Quote from HiddenAgenda:

Here's a good read:

Three cheers for the death of old economics
by Anatole Kaletsky

http://www.timesonline.co.uk/tol/comment/columnists/anatole_kaletsky/article6892820.ece

"The orthodox mathematical model took no account of reality.

. . .

Nobody seemed to notice that all this mathematical flummery left out the most crucial step of true science. Physics, chemistry and biology use mathematical models to draw conclusions that are then tested against reality. If reality contradicts these tests, then scientists reject the models. Today’s academic economics reverses this process: if models disagree with reality, it is reality that economists want to change."
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EXACTLY.
 
Quote from Martinghoul:

Rightie, so you're making a few distinct points here... Please correct me if my summary below is wrong.

Firstly, we seem to be agreeing that quants, whatever their other faults might be, are NOT to blame for the calamities that mkts periodically experience. Ultimately it's only the people who make the investment decisions that are to blame for whatever losses they incur.

Secondly, you are not happy with the extent to which quantitative methodologies have come to dominate modern finance.

Thirdly, you are not happy about the current state of the education establishment, as it, in your view, focuses excessively on the theory at the expense of practice.
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Spot on with point 2 & 3.

I still have an issue with point 1, especially when people go around winning Nobel prizes for flawed mathematical theories. You can't blame someone with a Phd in physics for taking a 6 figure salary for an investment house.

Can we at least have quants take equal blame with the people that rely on their flawed risk assessment models ?
 
Quote from hermit:

Yes Martinghoul, basically he wants to change the world and make trading more difficult. :D
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Actually - none of this really has any bearing at all on how difficult trading is/isn't.

It does have a great bearing on many retirees though, for whom I do have a lot of sympathy.
 
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