Trading with Academics

I figured that I would bring some of ET’s posters up to date.

I have a transfer application submitted to a better University. I am currently awaiting matriculation. Two more are in the pipeline, if this one goes sour.

I slowed my trading activities before the end of 2006. I currently do not activity trade like I use to. I have moved some money under a management team, while I focus on academics. However, I have recently (3/2007) picked up my hawkish watch of the markets. I have not really moved any money around. I spend most of my time doing research, whatever I can get for free. The one thing I miss about my trading days was the time I spend backtesting and writing scripts. I can’t explain how much I miss it. Give me some trance/techno music and a scripts program and I can sit there all day. Now with Stat 201 complete, I realize how important backtesting is and how to correctly use indicators. I still have my best scripts saved. A ccy account with 100k would have returned 15% per year for the past ten years, not including transaction, slippage and interest charges. I know I can get something north of 40% per year for 10 years if I try again. I just haven’t felt like devoting the cash for the program. I have a blue Brazilian wood, blog and non-profit LLC adventures at the moment.

This past semester did not go as planned. I began the semester with a lot of energy and focus toward learning what was being taught inside the classroom at my current school. At the 4th week mark, I went to two universities’ campus visits. I was shocked to find out that my father and current school were lying to me for the past two years. I could have transferred to a better school a long time ago. I would have had better teachers and real students to converse with. Needless to say, I lost a lot of wind from my sails. I still went to every class, but I was seeing red. As a result from this hick-up my GPA is lower after the completion of this semester’s full course load. It is sad that I was not trading.

In the same timeframe, I began to butt heads with my math teacher. The class was pre-calc. The subject was imaginary numbers. I asked a question that also created a red cloud in her classroom. She explained that (i^2) is equal to -1 and so on and so forth. I asked “Why it was imaginary when it had a fixed value?” She had no solid answer. I asked “Why are you spending time teaching it then?” She took this remark as arrogant and a challenge to her teaching ability. This situation just reinforces my feeling that classroom/textbook teachings are not connected to real world experiences. I understand that most of the information I look at is too advanced for classroom discussions and I question everything until it is proven, but I feel that it is a waste of my time and money for a teacher to present principles which do not concede with present day theatrics.

During this period of discovering the lairs in my life, I have recently discovered a few more. While these correct or incorrect examples might be situational, they show me that I should not trust anyone but myself.

Timmyz -11-12-06 12:25am

“making it on your own steam is not a possibility on wall street. you should know that the people at these firms are valued not because of their involvement with the firm but because of who they know.”

This is completely wrong. I have just completed a round of job interviews. The response from everyone was opposite from this statement. You can cold call a firm, not looking to hire anyone, and possibly get a job.

Father-
“The chance of a sophomore with no experience, getting an internship this late in the game is close to zero. You will be lucky to even get a call back.”

Well, 40% (2/5) called me back within 24 hours from my walk-in cold calls. Dad is wrong.

Father and Academic Advisors
“You need more credits to transfer”

This is not true at all. Schools accept transfer students that have completed +15 credits. I have +50. This is wrong.

On a positive note, I have strengthened my friendship with my current friends. I have spent a few nights in Old City and waking up in a girl’s bed is always good times. I have not made any new friends which are around my age. I have developed more friends in the financial services and data analysis areas, but these people are a lot older than I, so drinks are out of the question.

One major issue I view that prohibits me from surrounding myself with other students is my geographical location. I am surrounded by professionals, which makes it hard to engage in a college-like environment and activities. I live in an apartment complex where I am the youngest by far. I am guessing the difference is at least 6 years. Layers, news reporters, state troopers and advertising directors live on my floor. I grew a beard just so they would stop looking at me oddly in the elevator.

I do enjoy going out, but in reality it is a hassle. I am not sure what it is. People, who claim to know me or have heard of me, feel the need to challenge me. I receive aggressive, rude and stupid comments all the time. I am not sure if they hate who I am. If they worry I will steal their girlfriends. Maybe, they take the way I look and movement of my eyeballs incorrectly. It is getting out of hand to the point that I don’t enjoy having a street side dinner table because I know someone will bother me.

One thing I have tried to develop in my category of character traits is passiveness. It is hard at times. I kick myself after some situations of being passive. I am kind of undecided as to when to be passive and when to be aggressive. I also struggle with switching from one to the other rapidly. I don’t really care that much about the issue. This paragraph is long enough. I will act the way I feel the situation or person deserves.

One of the reasons that this response is so delayed is because I have been waiting for a Jamais vu of the following quote, “You might also consider who you are accountable to, and who you are responsible to.” My original answer has not changed. I am only accountable to and responsible for myself. One could argue that I am to my parents, but previous postings explain my parent to child relationship. I still do not see a different answer.

I want to thank all the responses from the ET members. Jack Hershey and Tonyzhou in particular. Your efforts have helped me clear my head and gain a sharper, more direct focus of my target.

Mr. Hershey, I would like to know your book list. I have some free-time this summer, because I could not find an internship, and I would like to spice up my reading selection. I have looked into a Wharton tutor. I have not tried that hard after my first contact. I believe that a better school is needed first, but I will look at this again in the future.

 

some advance drafts for his books.

 

(i^2) is <i>not</i> an imaginary number and does have a fixed value, which is -1, as you point out. Your teacher should have been able to explain this. i, on the other hand, <i>is</i> an imaginary number, equivalent to (i^0.5) which has no real value. However, I agree with her, that the remark seems arrogant coming from a college student to his/her teacher.

 

(1) It's incredibly naive to think that a personal introduction from your father or others some how takes away from the legitimacy of your career. It doesn't. Word of mouth is a very usual channel for recruitment. From the perspective of a hiring manager, the person being recommended is known to someone he probably trusts to a degree. That's better credential than any cover letter can possibly do.
(2) You i^2 comment is incredibly arrogant. The "imaginary" part refers to "real" of "real numbers." i is not a real number. Whether or not it has a fixed value is in fact not even a well defined statement. Moreover, it is quite useful in finance. (Though, I'm sure many ETers will point out that it's not useful in trading - a point that is true to a large degree; but a well run institution has more components than just "trader." Moreover - an oft missed point - an institutional portfolio manager (the guys making the real big money) wear marketing, analyst, risk manager hats just as much as "trading".)
(3) As a hiring manager for a fairly large institutional asset manager, your personal trading not only will not help you, but will hurt you. What you think you know about the market is not particularly relevant to the actual world. If I see “personal trading” prominently on a resume, it goes into the trash. Many of my colleagues in and out of the firm and both sides of the street tend to agree.
(4) I care a lot about GPA, but not because I think the courses you take are relevant. It’s because getting good grades is a tedious, boring, and somewhat pointlessly difficult exercise. Your lack of good GPA tells me that I have no reason to believe that you have fortitude, patience, and control.
(4) Speaking of the actual world for starting out: on the saleside you have: (a) analysts, (b) assistant product traders (ie: GMAC recovery locks, spx volatility swaps), (c) sales (d) middle/backoffice; buyside: (a) analysts, (b) execution traders, (c) risk/portfolio construction, (d) middle/back office. Note: there's no trading your own book. Which are you?
(5) You are (d) at best. I've seen folks working their way out of middle/back quite often. But that's not a guarantee.

 

Sjfan,

There must be a simple miss understanding. I would appreciate a personal introduction or a strong reference when applying to a job. I just do not want to work for a firm that keeps their employees because of what they did yesterday but rather what the employee will do tomorrow.

I am frustrated with my father’s ability to call someone. He offered me a one-day viewing of a bank’s fills desk, 3 years ago. I turned it down for many reasons. First, I did not know what they did in there at the time. Second, I did not see a reason for them to hire me. Over the past few weeks, I have charged up my local connections. I am not really surprised that I have found so many people who extended their hand and word of my abilities to potential employers. I have had connections pop up on a few firms I cold-called. My local presents, as I have expressed before, is deep; but it can always become more intricate. I just wish my constant attentiveness to defend personal bashing could take a rest. Personally, I have more connections to financial firms than my father has been able to offer. The ironic thing is that when my internship search expired, his trailer trash wife contacted an old friend who worked at a stock trading desk near me. With only his name and number, I am force to call this guy when I am no longer really searching for an internship this summer. She does not even know what firm the guy works for. I am not going to wait months for my father to mustard up a connection. I have to get them by myself.

“(4) I care a lot about GPA, but not because I think the courses you take are relevant. It’s because getting good grades is a tedious, boring, and somewhat pointlessly difficult exercise. Your lack of good GPA tells me that I have no reason to believe that you have fortitude, patience, and control.”

I have had this told to me many times. I understand the text and what it shows. Believe me; I was puzzled as to why I could not do this. These classroom topics are like peanut butter and jelly; basic. I asked myself, “why can’t I have Tiger Wood’s focus?” He goes out and shoots a great score even if he has an upset stomach or a fight with the wife. My answer to this question is simple. I am obsessed with efficiency. Is education efficient? I do not want to battle this question. It is; I believe. Am I efficient with education? This one matters if the individual is looking at my actions/performance either inside or outside of the classroom. Since GPA is classroom performance, I could be more efficient with my time spent there. So, why am I not? Presentation is the root of evil. If I am presented with inefficient information, I discard it, or at least I do not focus all of my efforts. This action, I believe, came from my trading days. Computer programs, personal finances, ways to participate in the market, conversations, friends and automobile oil and performance were accepted or rejected in the pursuit of greatest efficiency. It is only natural for my efficiency search to spread to my academics; hence trading with academics involves efficiency. Maybe it is getting out of control. Maybe efficiency should be allowed in select areas of life. Well, what areas? Basic economics elute to all areas. Everyone says raise your GPA. During analysis of how to raise it, I come across inefficiencies.

http://cfge.wm.edu/documents/CurriculumProfound.html

How is one able to look the other way?

If a firm hires inefficient people, I don’t really want to be there. I don’t need the job that bad, but from my lack of help and other issues I have with family members/people, I am extremely hungry.

 

you need to realize no one is going to care how smart you think you are. prove it (grades). want it more than oxygen. prove that.

i know where you are coming from as i gave up my tradestation account earlier in the year. i would just zone out all day noticing patterns, and coding strategies. however, the difference between us is that i have a 4.0 and an internship this summer. bite the bullet man, it sucks i know, but how bad do you want it?

 

hey man.. if you have an edge on the market your 30K tuition could go along way taking a year off from school to trade.

 

I have heard a lot of talk here about GPA. A good GPA is nice but when you see a banker for a loan he does not care a bit what your GPA was. The only thing he cares about is your credit score. Unfortunately they don't teach that in school. And unfortunately when a lot of students get out of college they have a very low credit score as well because they are hooked on credit cards.
Hopefully you are not.
Good GPA is only any good if the underlying degree is a marketable degree. A good GPA in history or English doesn't count for squat.

 

I am obsessed with efficiency. Is education efficient? I do not want to battle this question. It is; I believe. Am I efficient with education?


You may very well be right. You might be very smart and very efficient. But you see, I (or any other hiring manager facing you) don’t know this. I can’t really figure out who you are by talking to you for 45 minutes. Consider the logic in this Bayesian setting: the probability of a low skilled person going through school with good grades is 40%. The probability of a highly skilled person going through school is 60%. Moreover, I have no idea whether you have good or poor skills. What’s the probability of you having low skill GIVEN that you have good grades? And vice-versa?

I’m pretty sure I’m wasting my time here, since no one can really be taught without the scars of experience. But it’s a slow Tuesday and nothing’s trading in my markets – so, at the risk of sounding harsh: If you want to work in actual finance (as oppose to at home, being “retail”, which according to the folks here, of course, is a viable career option), (1) your personal trading means nothing; (2) you don’t understand the markets, (3) you don’t even know what the actual markets are, (4) you don’t know how actual markets trade (for example, a certain instrument I trade is quoted (over the phone) in a set of 4 numbers with the actual price being very difficult to calculate. It’s not esoteric either – I can do a billion on either side without moving the market 1bp), and finally and most importantly, (5) you don’t know what you don’t know.

I’ve been reading this forum before I actually started in finance. Thank god it was only a diversion for me. Hate to see someone’s career actually being delayed because of it.

 

If you are a student you should keep in mind that most of the people on this board trade their own money from home, but if they are successful it has likely taken them a lot of money and time to figure it out. most of them will tell you not to even attempt it without 100K to finance your "tuition." I bet if they could be 22 and have a job being TAUGHT how to trade for a salary they would jump for it. Thats why a GPA is important, it can be so much easier if you have a good place to start. To get one of these jobs the competition is so fierce no one will look at your resume with a shitty GPA. So do you need college? of course not, but if its there for you use it. It will be a lot easier than trying to sort through what is real and isn't and learning to trade for yourself.