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The Quants Run Wall Street Now
- zootam 9y agopaywall
- jacobolus 9y agoA google search turns up http://archive.li/8dNIW http://archive.li/8dNIW
- wand3r 9y agoSick of paywall posts. I don't get why this is down voted. Google trick doesn't work for all paywall posts.
- grzm 9y agoPaywalls can be frustrating. As far as I'm aware, the web links for WSJ no longer work, and I intermittently have issues with FT. Are there others you have issues with?
- wand3r 9y agoOther than those, NYT. It's usually not too bad but iirc they are dropping support for work arounds. It also seems to be posted with very high regularity and volume here.
- grandalf 9y agoI wish it would end. I'd like to simply hide all paywalled articles. Why not offer a flag?
- vinceguidry 9y agoI'd like a flag, but I don't want it to hide paywalled articles, but rather to just make them a different color. That way I can skip the link and just focus on the discussion. I think this would cut down on most of the meta-discussion that happens every time a WSJ or FT link gets posted.
- afarrell 9y agoThere are people who believe paywalls are the least-bad solution compared to a world where journalists can only make money from advertising (thwarted by adblock) or writng corporate puff pieces and lowbrow clickbait.
- icantdrive55 9y agoI just wait until someone here summarizes the article, and posts it here---it's usually more concise, and less wordy. And after a few hours, with all the people chiming in, why bother to read the original article. I wouldn't want to be a journalist these days whos work is condensed, and put on to sites like this. Then again, the WSJ could put up a site like HN. I wouldn't even mind a few ads. (And no $400/yr. for a digital version is not something a guy like me considers reasonable.)
- mianos 9y agoThey do if you think balancing an index weighed fund is high math.
- cheez 9y agoFor the most part, execution does not require high math, but the modeling required to find arbitrage or alpha does. So for example, managing an index weight fund is simple on the face of it but when and how you choose to rebalance your portfolio can affect your drift. This is the part that requires high math. This is even more important if you're talking a billion dollar fund as opposed to a 100,000 personal account.
- lisper 9y ago> the modeling required to find arbitrage or alpha does Not really. Even if everyone is just throwing darts, half of the players will beat the market, and the more players you have the more extreme the outliers will be. Of course, the converse is also true, but no one pays attention to the losers. Both Vegas and Wall Street prosper from this same principle.
- cheez 9y agoI also think so, but... Gotta keep up the charade imo. Can't prove otherwise.
- vowelless 9y ago> half of the players will beat the market For how long? And if it is for more than one sample (year), then how do you explain the continued success of places like Renaissance Technologies? > Both Vegas and Wall Street prosper from this same principle. I think poker is probably the closest thing in Vegas that matches Wall Street. Probably why it is so popular among quants.
- moxious 9y agoThere's such a thing as real alpha and also just luck. In a market with so many players, you would also expect that random chance would predict many people winning consistently year after year. This is not to say that all such funds can be explained this way. But most of the successful ones likely yes
- rubyn00bie 9y agoFor those who don't know this trick, click the web link and go to the site via google (which is what the web link does) and more often than not the paywall disappears and you can read the article (at least consistently for WSJ articles this works). I do wish the web link was on the index page instead of the comments page so it was faster/easier/more obvious to use it.
- deleted 9y ago[deleted]
- grzm 9y agoThe web link no longer works for WSJ submissions for me. Have you found that it still works for you?
- rubyn00bie 9y agoYep still works for me but, I browse in private browsing mode constantly. It's probably a cookie that's preventing you from accessing it.
- grzm 9y agoIt doesn't work when I'm in private windows in Chrome or Safari.
- sillysaurus3 9y agoDitto. This is a tough situation. WSJ articles are generally high quality and probably worth paying for, but if there's an unbypassable paywall then there's no reason to feature it on HN. We could use it as a prompt. Maybe the comments could be a zone to talk about quants and wall street. That might be useful, but it'd have to be explicit. EDIT: I've actually wished for prompts on HN, for what it's worth. Other sites typically have ways of starting conversations without articles, and Ask HN's usually die except for a few lucky ones. Usually you end up in a situation where you want to talk about X but have to wait until a tangentially related comment is posted, and then sort of shoehorn it in awkwardly. Being able to spin up a "Quant thread" would be nice without a specific topic or question.
- caminante 9y ago>"In the battle for talent, quant-focused firms often are reluctant to call themselves hedge funds or even investment firms. Quant firms would rather emphasize their similarities to cutting-edge tech companies in Silicon Valley." Mirror, mirror, on the Wall [Street,] who's the [quantiest] of them all? I sense many money managers can't differentiate themselves with current ops and now want "quant headcount" as a differentiator in pitch decks.
- salesguy222 9y agoHaha, awesome thought that you've brought up here. I bet we will start to see title inflation as a result as well- that is to say, it is not that more highly skilled quants will be hired, but rather run-of-the-mill employees will be branded and marketed as "quants" I've noticed this drift everywhere: -Sales people are now "product evangelists" or "product specialists" -Operations employees who do accounts payable or receivable are now "Finance Analysts" (seriously) -HR are now "Human Capital Analysts" -And virtually everyone is now "Senior" or "Lead" or even "Manager" (of some process, not of necessarily employees) So, I guess we shouldn't be surprised when someone fresh out of college who more or less guesses on stock picks with the firm's money and some fancy charts are now hailed as "HIGHLY SKILLED QUANTITATIVE ANALYSTS"
- melling 9y agoWhat languages are quants using to build their models? R, Python, Java, Haskell? Are there any favored tools?
- jessriedel 9y agoTrading firm Jane Street is well known for using OCaml. https://blogs.janestreet.com/why-ocaml/ https://blogs.janestreet.com/why-ocaml/
- jzwinck 9y agoMajor ones include R, Python, Matlab, and K/Q, roughly in that order of current popularity. Matlab used to have more marketshare and Python less.
- latenightcoding 9y agoMost is C++
- jessriedel 9y agoThere's a plot where they differentiate "quant hedge funds" from "other hedge funds". How are they defining this? (To what extent is this just a matter of quant being sexy and more firms describing themselves as quant?)
- kobeya 9y agoWhether a computer does the analysis.
- moxious 9y agoIt's about whether the computer does the analysis or not, but that's just a stand-in. The real difference is whether and idea or investment strategy can be systematized to the point where it's automated. That implies that there's no emotion or personal bias in most individual trades. Contrast that to humans doing the picking where there's a fair amount of "lick the finger and hold it up to see which way the wind is blowing"
- dsacco 9y agoThe other commenters are correct-ish about "quant" meaning something like, "computers and technology." But for the most part it's now a marketing term. Discretionary/fundamental hedge funds also use data pretty extensively, and they also use trading algorithms. It's largely about technology culture, not simply the way in which trades are chosen (or not, as it were).
- m3kw9 9y agoLet's just look at big picture on what actuall affects stock prices over log run: a good company is be found out eventually
- mi100hael 9y agoThat's the hope. Otherwise your diamond in the rough will remain a lump of coal forever.
- 10165 9y agoI know there was just a discussion yesterday on how amp is awful but it still is useful, e.g., to read WSJ articles. curl -o 1.htm https://www.wsj.com/amp/articles/the-quants-run-wall-street-now-1495389108 sed -n '/./{/<title/,/<\/title/p;/<p>/,/<\/p>/p;}' 1.htm > 2.htm FWIW, 2.htm has no amp elements, no Javascript, no images, no ads, no externally sourced resources and therefore no tracking. Add links to non-essential images (cf. auto-loaded by browser). With available captions. sed -n ' /./{/div class=.image/,/<\/div/!d;s/ *//;} /src=/{s///;s/\"//g;s/.*/<a Href=&>&<\/a><br>/;} /alt=/{s///;s/[\">]//g;/./s/.*/<P>above: &<\/p>/;} /Href=/p;/<P>/p' 1.htm >> 2.htm
- PhantomGremlin 9y agoThis is excellent. Most times I'm willing to live with just the text. The article had some pictures and graphs (see archive.li someone else posted). They were nice but they weren't essential.
- themodelplumber 9y agoHow is this different from using 'links' or 'w3m'?
- duckmuck 9y agoCan you explain to me what I am looking at here? (curl -o 1.htm... >2.htm)? And how I can use it to view an AMP page?
- deleted 9y ago[deleted]
- crimsonalucard 9y agoThe value of something across the span of milliseconds has no meaning. At this temporal level of resolution it's just a gamble no different from games like poker. Why deploy brain power on trying to extract this value? What a waste of intelligence.
- meddlepal 9y agoIf you haven not been keeping up, since about sometime in the mid-1980's acquisition of Money became the defining virtue of goodness and success. That's all that matters now.
- fizixer 9y agoThe problem is that it's more like sports than math/science: a tug-of-war (zero-sum game) instead of win-win. You're pitting your intelligence against the intelligence of other quants (not against the complexity of some natural system or something). You have 3 phds? they bring in 4. You bring in 6? they bring in 10. You bring the processing down to 50ms, they go 45ms; you go 5ms, they go 2ms. The game never ends. It's even more depressing when you realize that, even if you win, you're essentially propping up, what I like to call, a "fluff market", instead of adding-value the way Silicon Valley and the manufacturing industry does.
- crimsonalucard 9y agoExactly. It's a total waste of resources. Put these phds on curing cancer instead of playing a gambling game that adds no real GDP to the economy.
- deleted 9y ago[deleted]
- zackmorris 9y agoAnyone have hard numbers on if/by how much quants outperform old fashioned techniques like flags and finding stocks that tend to go the opposite direction from the one you're interested in? I don't know the terminology for all this but I know there are limits due to uncertainty so even the best algorithms may not do much better that someone guessing. Do quants do 10% better, 2x better, 10x better? My Dad and I had a relatively lucky streak where we doubled our money day trading Apple on margin after the September 29, 2000 dot bomb: http://money.cnn.com/2000/09/29/markets/techwrap/ http://money.cnn.com/2000/09/29/markets/techwrap/ He saved quite a bit of money by being able to trade 1000 shares each time. Since the stock swung +/- 2% a couple of days a week it was pretty easy to make 2% most days, 5% on a good day. It was like a casino where the odds were 2% in your favor, with a ratchet that just sold when it was about to go down. Then you just guess the shape of the day’s heartbeat. He wouldn't even let me sell short because he felt it was unethical, so we only gained half what we could have which was agonizing to endure. I pleaded for him to get out because he was up a couple years of my wage at the time and my gut was screaming at me that something wasn't right. Then we lost all the gains the day 9/11 happened. We sold a few weeks later and ended up breaking even. Then Apple went to 500 over the next couple years with splits thrown in to boot. I wanted to try day trading myself but they changed the law in 2001 so you had to have $25,000 to trade on margin, so only the wealthy could get twice the gains: https://en.wikipedia.org/wiki/Pattern_day_trader https://en.wikipedia.org/wiki/Pattern_day_trader I personally don’t buy any of the standard advice about risk because it’s more risky to keep your money in a bank and only get a couple percent a year. I felt so miserable about the whole experience that I worked a bunch of dead end jobs and ran up my credit cards over the next several years. It’s heartbreaking to know how hard typical folks in the world work to make $100 a day when day trading $50,000 can easily earn $1000. But those folks don’t have $50,000 so are locked out. I guess in my heart it felt like stealing, or at the very least finding yourself in the universe where you won and thinking you somehow earned your survivor bias. So I don’t do it anymore, and I’m even hesitant to invest because politics are so volatile right now. Sorry to digress, I should have stopped at the first paragraph.
- pilom 9y agoBut even with all of those advantages, you didn't make $1000 a day. You broke even and almost lost money. In order compare to someone making $100/day you need to make money consistently for a long term. No one can consistently turn $50k into $365k/year because if you keep making bets like that, you eventually lose just as big as you win.
- SirLJ 9y agoEveryone can try to do it, but you need to spend the time and educate yourself like in any other profession or hobby and the first step is to go to eBay and search for historical stock market data, you can buy 20 years of data for less than $100 and you can test all trading ideas for free and without losing a single penny...the barrier for entry is very low, some Python knowledge + Linux machine and the data and off you go...
- auvi 9y agodidn't know that you can buy historical stock market data on eBay. what search queries to enter?
- SirLJ 9y agoI found it by searching for "historical stock market data" :-)
- yourapostasy 9y agoWhy isn't this data out on torrents? Is it somehow copyrighted?
- tzs 9y agoI have a hard time seeing how it could be copyrighted, at least if we are talking about comprehensive stock listings organized in the obvious way (e.g., a table of prices organized by date, where the stocks included are chosen by some straightforward criteria). In the United States I'd expect this to be covered by Feist Publications, Inc., v. Rural Telephone Service Co., 499 U.S. 340 (1991). [1] https://en.wikipedia.org/wiki/Feist_Publications,_Inc.,_v._Rural_Telephone_Service_Co https://en.wikipedia.org/wiki/Feist_Publications,_Inc.,_v._R.... [2] https://www.law.cornell.edu/copyright/cases/499_US_340.htm https://www.law.cornell.edu/copyright/cases/499_US_340.htm
- HappyTypist 9y agoNondisclosure agreements.
- dluan 9y agoMy question for these new would-be quants is, how do you see your work? I know there are certain types of smart whizzes who see working for Google/Facebook/Amazon as some sort of intellectual step down, or where in finance the value to society is some handwavy "market-making" argument (depending on how philosophical you get), but presumably these types going into this are also tenure-track, research producing scientists. You could spend your time disproving the Higgs at Cern, or you could optimize pennies (albeit in ever more challenging ways). Have these Renaissance/TwoSigma type firms really ever delivered social value that isn't a new trading model with a limited shelf life? Is there new tech? Network, hardware, software innovation that spills over into the real world?
- tptacek 9y agoThere's nothing handwavy about the liquidity argument. Improving liquidity reduces the cost of trading for almost everyone in the market and thus makes almost everyone just a little wealthier. That means ordinary people, like schoolteachers and custodians, retire with a bit more money, and are a bit more comfortable; it means lots of people can donate just a bit more money to charitable causes without crossing whatever financial safety line they have, &c. It's hard to make the same kind of argument about adtech.
- HappyTypist 9y agoNot everyone at Google works on adtech. There are many people working on browsers that have sped up and innovated the web for hundreds of millions of users, or operating systems that are the foundations of many people's lives.
- revmoo 9y agoDon't post paywalled content
- msavelyev 9y agoCan anyone provide any example of what kind of models they build in all these hedge funds? Also what data their models are usually based on?