Why quants don't get paid

G

guru

https://news.efinancialcareers.com/fr-en/328235/quant-pay

More than ever before, finance is a quantified world. Nearly all stock trading is now done by quantitative traders, or by the computer algorithms they’ve developed. On the buy-side, the world's largest hedge funds trade using systematic models, whilst the rise of passive indexing means that fewer investors are pinning their hopes on traditional stock pickers.

These trends are making some people very wealthy. At the top of the tree owner managers of large quantitative hedge funds like James Simons (Renaissance Technologies), Ray Dalio (Bridgewater), and the UK’s own David Harding (Winton) regularly hundreds of millions or even billions.

Sadly the same cannot be said for most quants, who have to toil in the trenches for relatively small pickings. Almost none will ever earn the seven or eight figure pay packets that senior traders and portfolio managers view as a just reward.

(continued at the link above)
 
Thanks. I guess he gets paid for writing content.
Though all those articles may be correct, depending on who you ask. There are plenty of wanna-be quants, junior/newbie quants, quants that shouldn’t have been quants, experienced quants that can follow instructions, expert quants, and quants that can run their own funds if they want to.
 
Hi
I wrote the first article mentioned but not the others (check the byline). I do get paid, not very much, but I can assure you I would personally never write 'uninformed industry gossip'. I can't comment on the other articles.

What specifically do you disagree with in the article?

GAT
 
The article is not necessarily incorrect in the numbers stated. But the gist of the story can be reduced to a short paragraph. Either you are as quant the producer of the strategy that is profitably employed or you are not. If you are and accept less than 7 figures and did not contractually safeguard the proceeds of your IP then you are either stupid or naive, which comes down to the same in professional finance. I ended countless Goldman/others phone interviews prematurely because it became often perfectly clear early on that the bank/MD was unable to offer the guarantees I was asking for. No need to continue the conversation. I now trade my own funds, which I accumulated in over 13 years at banks and hedge funds, in my 7th year and could not be happier. I was a discretionary prop trader and always wondered what made developers toil in exchange for their measly salaries. Most "quants" at banks get fleeced and they should know it. If they don't they don't deserve to know.

globalarbtrader said:
Hi
I wrote the first article mentioned but not the others (check the byline). I do get paid, not very much, but I can assure you I would personally never write 'uninformed industry gossip'. I can't comment on the other articles.

What specifically do you disagree with in the article?

GAT
More...
 
guru said:
Sadly the same cannot be said for most quants, who have to toil in the trenches for relatively small pickings. Almost none will ever earn the seven or eight figure pay packets that senior traders and portfolio managers view as a just reward.
More...

Supply and demand. If the good quants were as hard to find as good senior traders and portfolio managers then quants would probably get paid much more.
 
southall said:
Supply and demand. If the good quants were as hard to find as good senior traders and portfolio managers then quants would probably get paid much more.
More...

It's the same problem with software developers. Being paid $150K for creating 10 mill in value is a joke. The problem with software of course is that it is highly commoditized and so you have to somehow stand out. You don't need to be a genius to understand what software developers do and how to use the same tools they use. The genius comes in how you combine those tools to create something new. Further, the really great managers know how to combine average people to produce above average results so they may not even need your genius. I would be surprised if it's so much different in quant work.
 
nooby_mcnoob said:
It's the same problem with software developers. Being paid $150K for creating 10 mill in value is a joke. The problem with software of course is that it is highly commoditized and so you have to somehow stand out. You don't need to be a genius to understand what software developers do and how to use the same tools they use. The genius comes in how you combine those tools to create something new. Further, the really great managers know how to combine average people to produce above average results so they may not even need your genius. I would be surprised if it's so much different in quant work.
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The last corporate project I was a part of cost the company over $3 million and was barely generating sales. I still got paid though :) I am currently working on my own commercial tech. Good news...if it is profitable just me and whoever else may join the venture gets all of the profits. Bad news...I am currently bleeding money each month. That is the trade off and I am happy with it. Also, I have never seen a group of average devs create above average results. What usually happens in practice is you one or a couple of strong devs (maybe rock stars) and they spend part of their time coaching the other team members.
 
fan27 said:
The last corporate project I was a part of cost the company over $3 million and was barely generating sales. I still got paid though :) I am currently working on my own commercial tech. Good news...if it is profitable just me and whoever else may join the venture gets all of the profits. Bad news...I am currently bleeding money each month. That is the trade off and I am happy with it. Also, I have never seen a group of average devs create above average results. What usually happens in practice is you one or a couple of strong devs (maybe rock stars) and they spend part of their time coaching the other team members.
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You're right, there are always a couple of strong devs in such teams. Point is that you don't need a full team of them. If you, as the manager, can be that strong dev and coach everyone else, then you don't need a team of strong devs.

That being said, if I had to spend 2 million vs 1 million and the difference was 2 strong devs vs 5 average, I'd choose the 2 strong.
 
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