Seems to be alot of ex/current Engineers in trading

Discussion in 'Trading' started by CasperCRF, Dec 14, 2005.

  1. I've noticed in past posts and with talking with some traders here that there seems to be alot of Engineers trading. I thought about this and I came up with this.

    1. Engineers work with math and numbers to build products but can also use the same skills to apply them to the market.

    2. Engineers are paid well straight out of college and thus will usually be the group that has extra money from their paycheck to invest.

    3. Most engineers work for a public traded company and have some sort of employee stock plan or have company stock in their 401k so they are some what indirectly involved with the stock market in a way.

    4. It only appears that there are alot of engineers in trading because almost all have internet access at their computer and post disproportionately on ET :D
  2. 5. The most laid off of all the kinds of employees as the economy shifts deeper and deeper into a service economy and not a thinking economy.
  3. skepticaltrader

    skepticaltrader Guest

    Ripley, you put your finger right on it.

    Engineers are tired of getting laid off for work being sourced overseas. Its hard enough spending 4-5 years in engineering school to only come out and maybe make $50k/yr.

    Engineering is the most taken advantage of profession in my opinion. I can say that because I work as a Mechanical engineer.

    Like to hear from the rest of you engineers who like to trade better than they like engineering.
  4. yes.. engineering way to hard!

    you dont have to work.... just trade stocks with money from refi'ng your house 10x

    this is the "new economy".. nobody needs a job
  5. Engineers seem drawn to technical analysis but not necessarily to trading. I remember noticing this in the '70s (for example, John Magee of Edwards and Magee fame, MIT grad) and it holds true today (for example John Ehlers with digital signal processing).
  6. Just ask Rubberbird.
    He has a tremendous understanding of regression analysis that helps him put together his extraordinary market calls.
  7. swordking


    I'm an ex-me that saw the light. I gave up my office job to work with my brother appraising real estate. When I wasn't appraising or fishing, I started to look at stocks a bit more. Now I trade as much as I appraise, make way more as I did as an engineer, and I'm my own boss!

    The benifit of being an appraiser is the knowledge of the local real estate market and being able to identify underpriced homes. I make as much flipping homes (having someone else do the work) as I did as an engineer.

    Work smarter, not harder.
  8. I was involved in IT Consulting for 17 years (I know, I know it is not real engineering :)
    Recently (4 years ago) I was faced with a dilemma - either move to India and learn hindi and work for 5 dollars an hour or change fields. I love India and the culture and philosophy but I rather stay in the good Ol' US of A.....
  9. I am currently still working as a software engineer (19 years and counting) and trading part-time, although considering moving towards more trading over time, and possibly real estate investing or other pursuits as well.

    Reasons engineers are attracted to trading:

    The main reason: Engineering is not rewarded as a CAREER, there is no upside long-term and it is hard work.

    1. Job security non-existent

    Loyalty to any company is foolhardy. You will be laid off in a split second the minute some corporate bean-counter figures out there is a more desperate engineer who will work for less, somebody gets a kickback for doing outsourcing, or there is any kind of economic slowdown.

    Your past dedication involving going beyond the call of duty to finish projects on or ahead of schedule, working through very difficult production issues, documenting designs, etc. will be completely ignored later.

    Most well-paid engineers I know job-hopped every 2-3 years or even more frequently, or were contracting along the way also, or something besides working with one company.

    2. Lucrative stock options non-existent now

    About 5-10 years ago, there were a lot of startups and fast growing established tech companies that were rewarding engineers with decent stock options which provided a potential upside for continuing on with the company.

    Now, with the hue and cry for "Stock Options Accounting", most companies response to that has been to cut back or eliminate any such broad stock option grants, and restrict them to upper management only. Even the existing options are frequently nearly worthless anyways because the tech stocks are not growing like they used to, and the stock prices are basically trading in a range.

    3. Overtime expected with zero compensation for it

    With many tech firms, there is often not-so-subtle pressure to work 50-60 hours a week as a way of life, rather than an occasional event in the life cycle when releasing a product. Those who don't do this are often fired, demoted, or otherwise penalized. If you have any kind of family life with a wife and kids, you will either be choosing to get a divorce or your career with be negatively impacted.

    4. Pay is decent coming out of school, but plateaus quickly

    Once you have about 5-10 years of experience in the job market, you will typically only see cost-of-living level increases in salary at best. Your reward for achieving 15-20 years of service is often a layoff because your salary has grown too expensive for the company.

    5. Your Christmas/end-of-year bonus is non-existent or a joke

    Unlike some financial industry jobs with substantial bonuses at the end of the year, you will often be given a 16 lb. turkey as a Christmas bonus, or perhaps some other chotsky type item like a windbreaker, a company catered "holiday meal", etc. If you see any money for a bonus, it will probably not reach past 3 figures.

    6. There is no technical path past 10 years

    You will be pressured to move into management, paperwork-oriented supervisory roles after about 10 years. For this "promotion", you will inherit a largely thankless busy job which can even more quickly be eliminated in a layoff. You also get the bonus of dealing with hiring and firing people, writing performance reviews, organizing and holding endless meetings to discuss work that other people are doing, and wasting your creativity in dealing with HR issues and budgets.

    If you insist on remaining technical, you will be treated as some sort of nutty professor or something, and will basically be disrespected. Your layoff is assured within 3 years of refusing to go the "management route".

    Considering all of this, being an engineer is basically a similar amount of risk to trading, except there is no unlimited upside potential.
  10. Engineering is among the worst majors for trading training. Engineers often get degrees and certificates without having understood principles or ideas. At USC, engineers rarely have to derive functions: they need only recgnize problems and apply memorized functions according to a fixed order (ie: multiplication operations performed before addition).

    Those who choose engineering tend to lack any talent for trading. Engineering offers job security and a fixed income. It also offers a job with known requirements. These people make poor entrepreneurs and traders.

    Few quants run money and even fewer engineers. Except for Renaissance Technologies, virtually all money managers have liberal arts backgrounds. George Soros considers himself a philosopher. Philosophy teaches one to think for oneself and not just apply known contructs.
    #10     Dec 14, 2005