4 ms·
Not a quant, but: Imagine playing a huge board game with a bunch of very smart (as in, MIT math PhD smart) players that spend every waking hour trying to come
by SonOfLilit 10y ago
Not a quant, but:
Imagine playing a huge board game with a bunch of very smart (as in, MIT math PhD smart) players that spend every waking hour trying to come up with strategies, and every time you come up with a good strategy the entire metagame of all players quickly adapts to its existence so the game stays interesting (except for some that lose before they can adapt and have to leave the game.)
Factors in a good game strategy might include fast thinking, every historical move a player played in the game, human psychology, poker-type bluffing, reverse engineering algorithms based only on their outputs, correctly predicting the future of industries and companies, headlines on the news, sentiment analysis on social networks, predictions of election results (and stuff like the Brexit referendum), as well as the complicated rules of the game itself, and Sicilian Reasoning (http://webdocs.cs.ualberta.ca/~darse/rsb-results1.html http://webdocs.cs.ualberta.ca/~darse/rsb-results1.html).
Some things you might do as part of a strategy: charter a fast ship to send information to your friends in another market before it becomes public, so they can buy a lot of stuff before it's price goes up; buy a donut every week in the same shop and keep track of receipt serial numbers to estimate changes in a franchise's weekly sales before anyone else knows them; use satellite imagery of Walmart parking lots and some computer vision algorithms to get a very good estimate of their sales; borrow $10Bn from your friends and use it all to sell British pounds in a very short period of time, forcing the British government to stop pinning the pound-dollar exchange rate and making $1Bn in the process; install a spy network throughout Europe so you get information on the result of the battle of Waterloo a day before the King's intelligence service, spread a rumor that Napoleon won, buy everything that got cheaper because of the rumor, then the next day sell it when the truth that he lost arrives and use the money to more or less buy everything of value in Britain.
At each point in time there is a clear tracking of scores so you can know exactly how well you're doing relative to every other player.
And the best thing is, you get paid the best salaries in the market to play this game.
I love being an entrepreneur because of how open the rules of the game are and how many creative moves I can pull off to get advantage without having to convince some judge or committee or boss that this is a good idea. Strategic quants have all this and the additional benefits of immediate feedback and a great salary with low risk.
- DrScump 10y agoA good example of real-world application of the donut-receipts idea above is the German Tank Problem[0] from WW2. [0] https://en.wikipedia.org/wiki/German_tank_problem https://en.wikipedia.org/wiki/German_tank_problem
- SonOfLilit 10y agoAll the ideas I gave were things that happened (or at least, that I read on the internet from reliable sources.) Chartering fast ships is from 1790, see e.g.: http://dewinforex.com/forex-basics/high-frequency-trading-financial-predators-of-a-new-century.html http://dewinforex.com/forex-basics/high-frequency-trading-fi... Can't find the link for the donut investor, but I'm pretty sure it was somewhere in Matt Levine's (highly recommended) Money Stuff column. Sat imagery of parking lots appears all the time in Matt Levine's column, there is a company selling this data to hedge funds today. Selling pounds is of course George Soros, probably the most famous story in Finance. Wikipedia claims the Rotschild story about the Napoleonic wars is fake. I read it on Quora here: https://www.quora.com/Whats-the-shrewdest-smartest-maneuver-youve-ever-seen-in-business/answer/Chua-Hsieh-Li?srid=tWvz https://www.quora.com/Whats-the-shrewdest-smartest-maneuver-...
- justanewguy 10y agoI got most of the references, but the donut one just seems very interesting. Please tell me if anyone here manages to find it. I'll be looking too.
- hkhall 10y agoI was working for the leading print marketing company that was starting to have serious competitors and post-IPO we were really concerned that people were going to order business cards from us all the time (since they were almost free) to track our daily internal sales via order number. I can't say that we ever had hard evidence that this was happening but we thought we had suspicious activity once so we changed it. An aside, changing order number to a hash value can be a huge pain in a manufacturing environment when people have (mis)used it to for a variety of purposes beyond order identification.