Really thanks for the reply. I loved the schoolwork, although I partied a little too hard in my first year. I tried hard to socialize away from my caltech undergraduate. I have another question. The head of desk is the head of the market makers, right? How come his skills are highly in demand in hedge funds? Don't most hedge fund take longer-term positions? E.g., months long positions?
Front my point of view, head of desk generally refer to the head of a certain product or strategy, for instance, head of swaps trading, head of statistical arb, head of program trading, head of CDO, etc, there are usually about a dozen or two head of desks in an investment bank. Market making is only one type of trade that ibanks engage in, but I guess using a broad definition, even structuring can be considered market making, I suppose. The term "hedge fund" I have long detested, but everyone I know uses it. "hedge fund" can range from a pure fundamental based fund, trading individual equities and only buy / write options (and basket options) to cover the vol, to highly quantitative funds that behaves like an ibank more than anything else, and engage in rapid trading. There are hedge funds that doesn't trade at all on some days, then there are hedge funds that trades 25,000 times a day, it depends on the particular strategy that the fund is engaged in. Also, most of the "hedge funds" don't hedge, at least not completely, so the name really is a "misnomer". I have tried to use the term "leveraged funds" or "alternative investment vehicles", but both terms mean little to most.
Does trading in your underwear from home,with ketchup stains on your Haines count as good experience?
Heh, I believe the NASA astronaut program is quite a bit more selective, since there are only 80-100 or so in existence. "best" is a highly subjective term. The initial question asked deals with getting into SAC (a roadmap if you will). It is debatable if publishing 1 to 2 Journal of Finance papers would qualify as "best" (I have one JoF to my name, and I am not even considered a "good" academic), but that's the kind of stuff that hedge fund eats up. As for "rainmaking" at an ibank, it would be required if someone is looking to run a desk for Citadel, for instance, not become just a trader. In fact, the top firms are more likely to take chances in a young trader with impeccable analytical skills a chance, and give him / her some play money to get a feel. IMHO, getting a published is a "cheap" (no-capital requirement) way to get noticed, and demonstrate good analytical skills. Getting published on a top level journal is no joke, it requires extensive background research, experiment design, and deep analytical insight, and often *years* of analysis and study, but it is not impossible. I have seen some masters level students generating some good ideas, they just don't have the research discipline and depth to push the idea all the way through.
Quote from rufus_4000: Heh, I believe the NASA astronaut program is quite a bit more selective, since there are only 80-100 or so in existence. "best" is a highly subjective term. I suppose my mildly sarcastic tone didn't translate well. A small point of contention -- there are far more than 100 astronauts in existence. Most are simply retired from active duty. How many buy-siders at SAC? The initial question asked deals with getting into SAC (a roadmap if you will). It is debatable if publishing 1 to 2 Journal of Finance papers would qualify as "best" (I have one JoF to my name, and I am not even considered a "good" academic), but that's the kind of stuff that hedge fund eats up. As for "rainmaking" at an ibank, it would be required if someone is looking to run a desk for Citadel, for instance, not become just a trader. In fact, the top firms are more likely to take chances in a young trader with impeccable analytical skills a chance, and give him / her some play money to get a feel. Published in the JoF. I'm very happy for you. Begs the question... why aren't you killin' it at SAC? Citadel does B-School recruiting, so it was an admittedly poor-example. SAC does zero B-school recruiting (for trading) and it's highly doubtful that writing a white-paper would break the barrier to entry for a trading position at SAC. I haven't a clue as to how many quants SAC employs, but they're certainly not traders. The academic reference was best applied to RenTech.
Apologies if I sounded arrogant. SAC is starting to recruit quants quite actively, as I have mentioned before, a person I know, Neil Chriss (formerly at Stern), is now the MD of quant strategies for them, doing mostly optimal trading strategy research, not new strategies, but better timing and information hiding type of research. Also, HF managers are not exactly "killing", most HFs hover around the 6-8-10% return mark, partners take home $1-2M, which is probably comparable to what they would make at an ibank. I would only go to a HF (or start one) if I have a fairly scalable strategy. I was in a couple of HFs, and almost all strategies have size and liquidity restrictions, frankly, sitting on a $30M book and need to find a profitable new strategy is a scary situation (and one of the funds I was with blew up precisely because we had too much money, and started to try strategies that we shouldn't be doing). There are some other reasons, for instance, most HFs (Citadel and RenTec are two notable exceptions) have no broker / dealer subsidiaries (Citadel with Citadel Derivative Markets and RenTec with Medallion, so they behave more like ibanks than your average HF), and my current strategies are peudo-market making in nature, so not exactly suited for a hedge fund without direct exchange participation.
I guess the probability of having just One paper accepted by JoF would be extremely slim. Too many professors including the journal's referees and their PhD students in the world want their papers published on the journal. It would take a very long lead-time for doing a quality research and then writing up a quality paper for submission. Then it would take a fairly long lead time to wait for the review results. Probably two or three re-writing before final acceptance. Then try SAC? How many masters students could afford the deluxe of publishing a paper on JoF? Probably approaching zero, otherwise a world record.
Trading is not that tough if you are trading your own money and you have the right type of mentor/experience. It can be done and it can be a very nice business. Software is still a very interesting area IF you are involved with the right types of projects or business ventures. The question you need to ask yourself if, which of these paths will you enjoy the most: if you make the choice only on the monetary aspects then ultimately you wont be happy and especially if you dont hit the bigtime and make oodles of dough .... but just make a very nice living (which you can do trading your own accounts by the way).
NatTrader, Have you ever thought taking advantage of your programming /quant background? As I said in my previous post, we had similiar aspirations. I applied to CBS and got rejected. A friend of mine from graduate school took a different route. Instead of applying to MBA, he networked with guys from graduate school with quant background and got into Renaissance Technology.