Recently, I read about the biographies of many PhD and professors in Finance/Statistics/Econ. Many of them admitted that they felt more comfortable doing analysis, risk management and research than trading. Some of them even said they afraid to put on the trades. So they went to top tier universities to get a degree and then found a job in the big companies. It seems they have more knowledge than me but just don't have the guts to trade. Is there any way to train a person to have more guts?
No. Teach a street kid good quant skills, and he becomes an excellent trader. Teach a quant to trade, and he becomes a gambler.
IMHO: People in academia are more conservative. A lot of Ph. D. hate uncertainty. That is one of the reasons they have chosen the path of least resistance, namely going to graduate schools after getting a Bachelor degree. Guts can not be taught. It has to be acquired. After working at Wall Street for few years, dealing with crooks and assholes everyday, they will have more guts. Trust me on that one. I spoke from experience.
Boy, sounds like a lot of fun! Its amazing more academics who get cushy salaries, lots of curious female students, and basically no expenses, don't want to sign up for that. Will irrational behavior ever stop !?!?
Well, it took NASDAQ almost 28 years to hit the 2,000 mark. But it jumped from 2,000 to 5,100 in less than two years. Was that rational ? Things are changing rapidly in US. Even a turkey can fly in a tornado. But the tornado has faded away.
Trading success has more to do with your psychological makeup than your IQ. The market has kicked the ass of some of the brightest minds on the planet. Yet the high school dropout can make a million dollars at it if he's got the right mindset.
... have this problem. Few of them are millionaire (maybe the style life for some of them, but anyway no cash!), and often a very limited portefolio. Also, they don't follow their own recommendation, and could say different thing at different peoples for the same problem, this is why many fines have been distributed last years!
in 1997 I applied to 3 PhD programs in clinical psychology. i had just started a job as broker, but had some decent GRE scores and a decent GPA(that one History of China class really killed me ). The schools I applied to were in the top 20 programs in the country, so I really didn't expect any acceptance letters. To my surprise I did get an interview at one. I went to the school, visited with Professors and grad students for 2 days. I'm not a very materialistic person, but seeing how these people lived was a bit discouraging. I remember getting back to NY and seeing the lifestyle of the people I worked with. I did get an offer. Full ride. I turned it down. Was it the right decision? I don't know. Right now I'd be Dr.Uptik PhD, probably teaching and publishing at some university. Constantly being distracted by young coeds. Lol...what does this have to do with the thread? Probably nothing, but I've had a lot of coffee this morning. Risk return ratio. Learn it. Live it . Love it.
I went to grad school and it was not easy: not the academic work but the lifestyle. Most of the folks at the top universities did not live well: A few did - like any profession. Teaching and research are a lot of fun: maybe I will go back to it some day but I'll take my current lifestyle over my professor friends any day ..... As far as trading goes .... I think it helped me quite a bit to work on the exchange prior to starting my trading career. I would say that with this type of background even an academic can be a good trader ... Without being toughed up by working directly in the markets I would say that a academic or even many quants will have a more difficult time making a go of trading: not that they cant succeed but nothing really substitutes for working on the floor of the exchanges for training .....
Despite the fact LTCM (Long Term Capital management) had a bunch of Noble prize laureates on their staff, their Hedge fund still blew up.