5 ms·

I did this in 2013. Went from working in a lucrative, stressful high frequency trading systems development environment, into developing systems for humanitarian

by hliyan 7y ago

I did this in 2013. Went from working in a lucrative, stressful high frequency trading systems development environment, into developing systems for humanitarian organizations. Loved the work, the next two years were the happiest and the most chilled out in my life. The negatives: burnt through a lot of my savings. I'm back in a different industry now, and the return was a bit painful, but looking back, it was one of the best decisions I've ever made. Advice: 1. Have at least two years worth of savings, or an alternative source of income that can cover all your basic expenses, or don't do it. 2. Don't take a job that requires you to work harder than you did in your old job. In the beginning, the change will be invigorating, but soon it'll start to wear you down. During my "sabbatical", I worked only six hours a day at most, saving plenty of time for family and personal pursuits.

einpoklum 7y ago
But in your case there is also a moral dimension, not just self-fulfillment: Financial speculation is parasitic and socially harmful without actually providing anything of actual real value. So, IMHO that's a switch worth making for essentially any decent job. Also, about working harder - that depends on how hard your old job was; and some of that hardship is sometimes due to working on something you would rather not be doing.
- tonyedgecombe 7y ago
  Financial speculation is parasitic and socially harmful without actually providing anything of actual real value. Is it? Farmers hedging against crop failure are getting a useful service, it's allowing them to invest in a crop without the risk of bankruptcy. The same goes for airlines who hedge the price of fuel, not many people would run a business that risked collapse if the price of oil goes up by 10%.
  - jnwatson 7y ago
    The futures market ran fine before the massive high frequency trading vampires running around. Liquidity isn’t a moral good.
    - tonyedgecombe 7y ago
      Liquidity isn’t a moral good It does make markets more price efficient though, as a small investor I prefer this over being dependent on the whims of someone like Warren Buffet. massive high frequency trading vampires It's a relatively small industry, profits in the US peaked at approx $5B in 2009 and have declined since. [1] [1]: https://en.wikipedia.org/wiki/High-frequency_trading https://en.wikipedia.org/wiki/High-frequency_trading
- snidane 7y ago
  > Financial speculation is parasitic and socially harmful without actually providing anything of actual real value. Is it parasitic? Look at it like mushrooms, which is what hedge funds are to our society. They both eat dead and rotting tissue. Eg. overleveraged companies or companies which lie to the investors to defraud them. Hedge funds short the hell out of them to clear out space for better companies. Are mushrooms and financial speculators parasitic if they feed off dead bodies?
  - omginternets 7y ago
    I know dreadfully little about finance, and your comment is quite intriguing. Could you kindly elaborate? How do hedge funds work, and what makes them particularly suited to recycling pathological businesses? Are there any notable examples?
    - kthejoker2 7y ago
      Strongly recommend you get The Little Book of Hedge Funds by the Mooch himself, Anthony Scaramucci. Succinct and filled with history. But the basic concept of a hedge is an investment to offset risk you've taken on as part of another investment. The typical purpose of a hedge is to smooth out your expenses or returns - for example, you can use the futures market to more or less "fix" the price of whatever raw goods your business needs. Large equity hedge funds take this concept to the "raw goods" of companies on the stock markets. They take a overall long or short position in the market and then offset that by making smart individual long or short bets on companies they think will over/underperform the market. So to answer your question, what makes them "suited" is the business is based on their ability to identify companies out of step with the market. They do a tremendous amount of research and analysis to accomplish this, and they share this research with their investors so you can make an informed decision on whether to invest in their hedge fund or not. Think of them as well trained bloodhounds or military scouts, able to spot danger or opportunity before others are aware of it and take swift action to deal with it.
- hliyan 7y ago
  > Financial speculation is parasitic and socially harmful Well, I can tell you from personal experience that mom-and-pop investors can't really compete with co-located HFT algorithms, and that they do seem to shift wealth further into the hands of wealthy investors (who can afford these systems). The industry did leave a bad taste in my mouth, but I feel they perform an important stabilizing function within the markets. These algorithms tend to be based on massive amounts of historical data, so one can think of them as hyper-rational. I feel (without anything to back it up, of course), they can guard against markets going into emotion-driven feedback loops. That said, I am a supporter of alternatives such as the Long Term Stock Exchange (https://en.wikipedia.org/wiki/Long-Term_Stock_Exchange https://en.wikipedia.org/wiki/Long-Term_Stock_Exchange).
  - jfk13 7y ago
    > I feel they perform an important stabilizing function within the markets I'm not convinced that's true. E.g. see https://www.researchgate.net/publication/228261350_The_Flash_Crash_The_Impact_of_High_Frequency_Trading_on_an_Electronic_Market https://www.researchgate.net/publication/228261350_The_Flash...: "We conclude that HFTs did not trigger the Flash Crash, but their responses to the unusually large selling pressure on that day exacerbated market volatility." That doesn't sound at all like "an important stabilizing function".
probablybroken 7y ago
It's also sometimes possible to get some small contract work with the employer you are leaving, so long as you don't burn any bridges. ( At least in software dev. There are frequently systems no one else knows how to maintain etc. ) It might not be a very appealing idea, but a few weeks work of this type a year can go a long way to offset loss of savings.
Terretta 7y ago
What if you had doubled down on saving at the first gig, worked that a few years more, then stepped into the humanitarian gig with all the runway you needed? Plausible?

by hliyan 7y ago

einpoklum 7y ago

But in your case there is also a moral dimension, not just self-fulfillment: Financial speculation is parasitic and socially harmful without actually providing anything of actual real value. So, IMHO that's a switch worth making for essentially any decent job. Also, about working harder - that depends on how hard your old job was; and some of that hardship is sometimes due to working on something you would rather not be doing.

tonyedgecombe 7y ago
Financial speculation is parasitic and socially harmful without actually providing anything of actual real value. Is it? Farmers hedging against crop failure are getting a useful service, it's allowing them to invest in a crop without the risk of bankruptcy. The same goes for airlines who hedge the price of fuel, not many people would run a business that risked collapse if the price of oil goes up by 10%.
- jnwatson 7y ago
  The futures market ran fine before the massive high frequency trading vampires running around. Liquidity isn’t a moral good.
  - tonyedgecombe 7y ago
    Liquidity isn’t a moral good It does make markets more price efficient though, as a small investor I prefer this over being dependent on the whims of someone like Warren Buffet. massive high frequency trading vampires It's a relatively small industry, profits in the US peaked at approx $5B in 2009 and have declined since. [1] [1]: https://en.wikipedia.org/wiki/High-frequency_trading https://en.wikipedia.org/wiki/High-frequency_trading
snidane 7y ago
> Financial speculation is parasitic and socially harmful without actually providing anything of actual real value. Is it parasitic? Look at it like mushrooms, which is what hedge funds are to our society. They both eat dead and rotting tissue. Eg. overleveraged companies or companies which lie to the investors to defraud them. Hedge funds short the hell out of them to clear out space for better companies. Are mushrooms and financial speculators parasitic if they feed off dead bodies?
- omginternets 7y ago
  I know dreadfully little about finance, and your comment is quite intriguing. Could you kindly elaborate? How do hedge funds work, and what makes them particularly suited to recycling pathological businesses? Are there any notable examples?
  - kthejoker2 7y ago
    Strongly recommend you get The Little Book of Hedge Funds by the Mooch himself, Anthony Scaramucci. Succinct and filled with history. But the basic concept of a hedge is an investment to offset risk you've taken on as part of another investment. The typical purpose of a hedge is to smooth out your expenses or returns - for example, you can use the futures market to more or less "fix" the price of whatever raw goods your business needs. Large equity hedge funds take this concept to the "raw goods" of companies on the stock markets. They take a overall long or short position in the market and then offset that by making smart individual long or short bets on companies they think will over/underperform the market. So to answer your question, what makes them "suited" is the business is based on their ability to identify companies out of step with the market. They do a tremendous amount of research and analysis to accomplish this, and they share this research with their investors so you can make an informed decision on whether to invest in their hedge fund or not. Think of them as well trained bloodhounds or military scouts, able to spot danger or opportunity before others are aware of it and take swift action to deal with it.
hliyan 7y ago
> Financial speculation is parasitic and socially harmful Well, I can tell you from personal experience that mom-and-pop investors can't really compete with co-located HFT algorithms, and that they do seem to shift wealth further into the hands of wealthy investors (who can afford these systems). The industry did leave a bad taste in my mouth, but I feel they perform an important stabilizing function within the markets. These algorithms tend to be based on massive amounts of historical data, so one can think of them as hyper-rational. I feel (without anything to back it up, of course), they can guard against markets going into emotion-driven feedback loops. That said, I am a supporter of alternatives such as the Long Term Stock Exchange (https://en.wikipedia.org/wiki/Long-Term_Stock_Exchange https://en.wikipedia.org/wiki/Long-Term_Stock_Exchange).
- jfk13 7y ago
  > I feel they perform an important stabilizing function within the markets I'm not convinced that's true. E.g. see https://www.researchgate.net/publication/228261350_The_Flash_Crash_The_Impact_of_High_Frequency_Trading_on_an_Electronic_Market https://www.researchgate.net/publication/228261350_The_Flash...: "We conclude that HFTs did not trigger the Flash Crash, but their responses to the unusually large selling pressure on that day exacerbated market volatility." That doesn't sound at all like "an important stabilizing function".

probablybroken 7y ago

It's also sometimes possible to get some small contract work with the employer you are leaving, so long as you don't burn any bridges. ( At least in software dev. There are frequently systems no one else knows how to maintain etc. ) It might not be a very appealing idea, but a few weeks work of this type a year can go a long way to offset loss of savings.

Terretta 7y ago

What if you had doubled down on saving at the first gig, worked that a few years more, then stepped into the humanitarian gig with all the runway you needed? Plausible?