quantitative finance

Machine learning, deep learning, and AI aren't as new to finance as many people think. I have a great conversation with Agus about his career and journey into quant finance. He provides some great insight on career advice as well as some of the issues he sees with using machine learning especially in finance.

Some of the important takeaways from this conversation are:
- Be nice to everyone you meet.
- ML is a localized method.
- Technical skills such as statistics can be applied to many different careers.

James Simons is a mathematician and cryptographer who realized that the complex math he used to break military codes could also explain patterns in the world of finance. Jim Simons has been described as "the world's smartest billionaire", amassing a fortune through the clever use of mathematics and computers. He has stepped down as the chairman of Renaissance Technologies, the most successful quant hedge fund in history this January. Simons has not overseen the day-to-day running of the $120 billion hedge fund for nearly a decade, but he had stayed on as chairman of the fund up until now.

Jim’s retirement marks the end of an era in finance. Simons’s career and the fund he launched proved that the finance textbooks which claim that markets are perfectly efficient were wrong.

Obviously, the trading strategies at Renaissance are secret, but let’s look at Simons career, and see what lessons we can learn.

The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution by Gregory Zuckerman: https://amzn.to/2Mkw2sf

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Derivatives For The Trading Floor:  https://amzn.to/3cjsyPF
Corporate Finance:  https://amzn.to/3fn3rvC

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Risk management seems to have lost its meaning. After the 2008 financial crisis banks have started labeling every department as risk management in some way. While it would be great if every department understood the risks they create or manage to any company, the over use seems to have diminished its actual value and meaning. The skills required to work in "risk management" vary greatly depending on what area you want to work in. Someone who might work in model governance or a first line of defense risk manager might require a business degree and experience using Excel. Other jobs such as model developer or model validator might require a Masters or PhD along with experience in statistics, mathematics, and computer science. The easiest way to figure out where in risk management you might fit would be to look at job postings and see what skills are required.

To make matters more confusing, the investing side views risk as VaR and ES. Don't get me wrong, there are some advanced firms out there with well developed risk departments and processes however there are a lot of firms with over simplified understanding of risk management as a big picture concept that should be applied to an entire firm.

YOUTUBE Version:
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One aspect of life is all the emotions we have as individuals. One of the hardest pieces for me is managing my ego and I don't mean that in a one sided view of having a large ego. Being able to balance your ego is crucial for success in life as having more ego helps boost your confidence and allows you to take risk. Not having enough ego can prevent you from personal and career growth. For example, imagine you want to get married and have a family. If you are looking for a spouse you need to have some confidence in asking people out and managing a relationship where your needs are met. From a career perspective it impact promotions as you might not ask for one or you might not take on the big projects which would allow you to get promoted.

On the other hand, having a big ego makes you a large risk to yourself and in my career of finance, it can ruin entire companies. Being overconfident or worse, delusional, means you'll take on projects that you will clearly fail. As much as some ego helps you build relationships, the lack of an ego will make you intolerable to others. No one wants to hear how great and wonderful you are all the time and also no one wants to be bullied.

Being able to balance your ego to the point where you take calculated risks in life while remaining humble is very challenging. The amount of ego you have will vary over time and being able to get the right amount will always be a challenge. In this podcast I talk a bit about my struggle with my ego and some of the external factors that made it too large at times and too small at other times.

Today's Talking Tuesday with Fancy Quant is all about his adventure to New York City. I'll discuss why I moved there, what it was like on Wall Street, and why I left. At the end I will highlight some fun experiences of living the Wall Street lifestyle. There are aspects such as the cleanliness that I didn't like but overall I loved living and working in NYC. The vast amounts of culture, the busy and exciting vibe of the city, and the amount of family, friends, and students that I could visit with were all amazing.

I ended up living in Long Island City (LIC - Queens), Upper East Side, and Weehawken NJ. I worked in LIC, Wall Street, and Mid Town.

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Being a Quant in the finance world is not all brains and riches as many think. Being able to talk openly about the industry hasn't been an easy task as I don't want to burn bridges and offend people, yet I feel it is important for those wanting to work in quantitative finance to really understand what you will face. This was originally a video I recorded a year ago however I felt like I highlighted too many negative aspects without a full picture of why they existed or how they impacted me personally. The idea of trying to express many of my frustrations with the industry is an undertone of my YouTube channel where the focus is to improve the industry through education. In this podcast I lay out a few realities:

1) The industry is full of average people
2) Conflict and burnout are common

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Have you ever wondered how to get ahead and develop a better career? Today Fancy Quant discusses starting a job, building relationship networks to help career advancement, and finally how and why to quit. This cycle of starting a new job, maintaining a current job, and ending the job will change frequency depending on career fit and career length. The higher you climb in a career the less positions are available meaning it is usually more advantageous to find a good company and try to work your way through the levels instead of jumping from company to company. Job hopping is usually beneficial in the beginning of a career and should be a time of self exploration to figure out where you fit best. Often people jump too many jobs and burn bridges which results in not many future opportunities. On the other hand some people will job hop often but not learn anything from each job.

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Nick Wade from Northfield and the Curious Quant discuss the impact of COVID on risk modeling frameworks, assumptions, and how the recent movements in asset markets may or may not impact the short and long-term assumptions of asset owners. 

Quantitative finance is an industry that is mainly comprised of non-US workers. Many of them get graduate degrees in the US and become citizens in the long run though. Today I am discussing some of the cultural differences I have noticed over the years. These cultural differences are not good or bad, they are just differences. Learning to be accepting is important in all jobs but especially in those where differences might not be realized.

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Managing your health as a quant can be challenging both physically and mentally. In this episode I will discuss some challenges I am facing and how I help solve them along with a few other solutions.

Weight gain and pains from bad posture plague almost all office workers as we sit at our desks for the majority of our time.

Anxiety, depression, and impostor syndrome are common mental challenges for quants. From work-life balance, to keeping up with every new analytical model and trend, to getting a graduate degree there are always mental issues to resolve. Finding what makes you happy and building a network of support are just a few crucial components to staying mentally healthy.

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The YouTube channel, Fancy Quant, ran by Dimitri Bianco started a new segment called, Talking Tuesdays which is now becoming a podcast as well. The episodes will be a personal perspective on the finance and banking industry from the eyes of an insider on the quantitative side.

Today's episode will cover in more details what Talking Tuesdays are, review the YouTube channel's success and some interesting stats, and will wrap up with a discussion on what Fancy Quant really represents.

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