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u guys look mean.

where can i learn Brazilian jujitsu in lagos ?

jasper
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nitrogen: Hmmmmmm! Work experience or further study? A lot of experienced guys here had and will always stress it that 'it is the experience first'. Seriously, i had a different opinion about work experience, i'd thought masters is the best option after first degree, but now it is clear that work experience is quite paramount.

some people will claim to have 5 yrs experience but what they actually have is 5 1 yr experiences.

spicy but you know some companies will specifically ask for your grade so leaving it out will not work in all occasions

spicy v: I graduated in 2005 with a 3rd class in a field a lot θf people consider professional but as far as I was and am still concerned, its a boooooring field! Having realized that, I quickly started the interesting process θf self discovery, armed with this knowledge, I went to a private organization to volunteer,that was before NYSC, during my service year alone, I had three job offers! Back then, I humorously say to my friends who were crazy about the masters degree that with all their certification, I would be offered a job before they would be considered if we all went for the same interview.

Truth is every employer I have ever come across find it hard to accept that I had a 3rd class and that is because θf my overall presentation, intelligent manner in which I engage their minds, the excessive passion I exude and the subtle but hard to miss its-your-loss-if-I-am-not-a-part-of-your-team aura I naturally exude.

In summary, I would say, if you have the opportunity to bag another degree and certification, go ahead! But you have got to be able to back it up else its just a waste θf time, effort and money!!!

maddam wat worked for u might not work for someone else

3rd class is just not a good class of degree at all. a msc will at least cover face small

go do a masters

crap topic

Chris Breezy

listening to this new joint from Chris Breezy


https://www.youtube.com/watch?v=Jxasrirp4kw

No. Real programmers use VI or Emacs

cfa is certainly not a worthless certification

violent: A model could be as simply as taking an average of the students in a room to infer a statement on the general population of black Africans...or as complex as optimizing a quadratic objective function to take the best advantage of a short spike in volatility. In my experience, Quantitative managers tend to use the latter more than the former. They are mostly not concerned about predicting the "future" but instead, their focus is shifted on living and making a full use of the "present". Predicting the future is almost an impossible task and looking at history may only give you an idea not the complete picture.

Good so we are in agreement that mathematically trying to predict the future is just plan useless

We have also established that the what happens in the past is not a precursor to what is happening now or what will happen in d future

However i do agree with you on executing trading strategies making maximum use of what is happening at the moment.


But your example of volatility trading is slightly misleading

Volatility is a statistical measure therefore it relies on historical price data.

But i think you are referring to implied volatility in your post which is the volatilty factored into the current trading prices of options.

If you were referring to this then you don't need a

complex as optimizing a quadratic objective function

to profit from volatility swings. A simple STRADDLE or STRANGLE which you have talked about will make you a guaranteed profit

wow

tobbi1310: Wow I blink for a week and this is what happens, this thread has gone so deep into analysis I fear there is nothing I have to say that hasn't been said and there is a lot I have to pick up and learn. Since I'm going along the quant path anyway violent and RixExpat are straight-up my mentors, I'm sorry candylips but as you are off to chop oyel money now it's best I follow my egbons still true to the industry (we have gone too far to go back to just relying on fundamental analysis alone, else you would be crushed in the short run by all the rocket scientists in the markets reeling in the major profit; like saying because the new version of a software has a bug we should all go back to the previous version, the only way forward is to try to fix the bugs and add extra features in the next version). I have read on many sites that a quant really does not need a CFA to do his/her job as violent said, but I feel knowledge is not lost taking the program anyway and it would definitely make some aspects of the work easier(as RixEpat suggested on the coverage of complex option and investment strategies).

Goodluck as you start your career in that space.

I had a fun time in the IB sector but didn't like the job volatility.

I guess i got to a point in my life where i valued job security and stability more

violent: Yes you are correct!..Models are an estimation, but what makes them useful above all else is the fact that they are completely devoid of emotions or the typical herding behavior humans are hard wired to follow. Ask any wall street analyst worth his salt to give you a detailed analysis of the market crash and property bubbles and you'd be surprised at the genius of such fellow's views, you shouldn't also be surprised if the same fellow tells you next year about why gold must have been overpriced this year ---Humans he?.. we only seem to know so much about the events after the events had actually taken place, models don't work that way!

...i have met fund managers who bought stocks because they have a friend who worked at the company, ignoring all common sense in the process of doing so!

Bros haba now .

So why didn't these grand mathematical equations predict the burst . Why did Lehman go burst with billions of worthless Credit default swaps obligitions. Why didn't their mathematical models predict the wahala of the US housing crisis.

Bros . even models don't have a clue of an impending disaster and it is only when u look backwards that the model might tell u something different.

The reason is because when you have statistics and probability as the building blocks of your model, then you only get to make decisions based on historical data. For example historical data prior to 2007 didn't tell anyone that US mortgage owners will not be able to pay their mortgage (even though instinct tells you something different when u see people struggling with 3/4 jobs just to pay their mortgage)

violent: Sound mathematical trading models at least understand that the market can stay inefficient for short terms and individuals can profit from such opportunities. Mathematical models can at least understand that maintaining a delta neutral portfolio while trading gamma effectively can be a smart way to profit from swinging markets --- which always swings as someone is always thinking "OMG, Europe is going burst" "North America is getting downgraded again" "China is going broke" "The world is gonna end and we are all gonna die" --- All these sentiments will always bring inefficiencies to the market and the smart quant alogs --- that have been designed by some cursed kids, to trade millions of positions with micro ticks-- will keep bringing in profits to their owners!

Please go and read LTCM. these guys had delta neutral positions, took arbitrage positions on bonds, interest rate swaps etc

The fundamental problem with these trading strategies is that they require you to take a huge leveraged position in other to make any sensible profit. And when you take such a leveraged position as the dudes in LTCM(pls refer to the book). You are susceptible to any major market events like the burst of 2008

violent: I dare say this opinion is not completely accurate!..Maths and Programming are inseparable! If you are employed as a "Quant" in most financial houses, the knowledge of programming is requisite (in the very least VBA)!..You can't simply claim to be good at mathematics. Anyone can have great maths ideas, but the most important part of your job as a mathematician is being able to bring your ideas into a portfolio in a way that maximizes the risk-return trade off. Of what good is anyone that can only work out algebra on paper? Get on Matlab son!

You are correct. But my argument was that a math geninus is better utilized doing maths.


From my experience there are dudes that work as Quant researchers/analysts and there are other dudes that work as Quant developers.

Here is how it works

A maths dude working as a Quant researcher/Analyst comes up with a model . . he probably backtests in VBA/Mathlab/Mathematica or R to ensure his assumptions are correct. Once he is satisfied he passes it on to the Quant development team. These are dudes who are expert C++/Java programmers but mathematically inclined. they convert his model into efficient algorithms. They ensure the algos are well optimized to support low latency . . etc

A third eye check is done by the risk management team. composed of maths,computer and finance geeks. They perform their due diligence i.e stress testing, scenerio analysis etc


All these guys from Research to Risk management can say they are "Quants" but the pure Quants are the maths dudes

RixExpat: Every investment bank and asset manager has its own investment principle and strategies for managing investments. The fact is that most wall street banks make their windfalls from proprietary trading but I want to believe that they all explore available tactics - quant strategies, fundamental analysis, tax-aware strategies etc depending on what works for them and the capability of the personnels involved.

In addition to these. These guys are market makers so they make profits from spreads. They also do internal crossing of trades and pocket the commission meant for the exchange or broker.

These are just some of the many tricks these guys use to boost profit.

violent: Sorry bro, but we may have been looking at these things from different angles.

There are always 2 sides to the coin

violent: It is my opinion that real "geeks" are not employed to deal with ol boring stuffs like default probabilities, VAR and all that ish!...that's pretty darn waste of talent. Probably common only in commercial and central banks.

Many geeks are hired to write algorithms, trade triangular and multiple arbitrages, quantify and trade headwinds, Gamma scalp etc etc.

There two types of geeks. maths geeks and computer geeks

computer geeks do the algo stuff. but maths geeks are more concerned about mathematics

There are very rare species of humans that have the ability to combine maths n computer geekiness

Most times you are very brilliant in one and suck or average in d other.

violent: sniffing around balance sheet statements and estimating probability of default is still the job of a fundamental analyst, and guess what? they all get it wrong most of the time!

Fundamental analysis is crap! many people continue to live with the grand delusions that they can estimate just how fast or how well a company can grow within a certain time frame. They get paid fat salaries for doing so and they still make weather forecasters look pretty darn smart!

I stupidly bought a stock (Chemring Group) a little over a year ago when it sold for about 7 pounds after reading stock research from some of the best paid fundamental analysts who all penned the stock as "overweight"...guess what? the damn shyt is now selling for 3.08 pounds and the bastards only just recently changed their recommendations.

i agree with u on this one.

balance sheet analysis has now become so complex with a lot of stuff hidden off balance sheet that it is almost pointless justifying a decision solely on fundamental analysis

This is were our God given instint [/b]comes in .

My former boss has this famous quote. [b]All models are wrong

violent: I'd give my money any day any time to a PHD who knows how to trade volatility like a fanatic than the dude who thinks he's got some special talents to pick up some of the most hidden details from a balance sheet!....they must think accountants that were being paid thousands to hide those details are i[i]d[/i]iots.

Even Noble Price winners Merton and Scholes who where board members of LTCM coulndt prevent the hedge fund from sensational collapse.

For those reading who don't know about the hedge fund called LTCM

Read about it here http://en.wikipedia.org/wiki/Long-Term_Capital_Management

or this book

When Genius Failed: The Rise and Fall of Long Term Capital Management

http://www.amazon.co.uk/When-Genius-Failed-Capital-Management/dp/1841155047/ref=sr_1_1?s=books&ie=UTF8&qid=1329388160&sr=1-1

violent: If you really think taking the CFA would make any difference, then you are in for a shocker! The CFA is regarded by many people as a qualification that is only good enough to impress clients. There's nothing better on a a marketing document than saying "Your investments are being managed by 20 CFA holders" ...it's all a gimmick, mostly for the uninitiated wealthy who just need some form of reassurance.

The world can only get greedier, not less, most desks would keep hiring people who can design models that will pass on the risks of a trade to the "other" guy while they keep the returns to themselves. Since the CFA does not teach how to do this, it is only a matter of time before no one cares about how much fundamental analysis you can do or how much ethics you have and the focus will be how greedy can you get and how well you can design models that will keep us afloat while the other guys get smoked. This is where the intellectual prowess of Phds and Quants come in!

am sure you are aware of the loan problem in nigeria a couple of yrs back.

The likes of dangote and co owing many banks in nigeria billions of naira and they refused to pay until the CBN stepped in

Am sure one stu.pid geek would have felt like a star when he used his intellectual prowess to design some default probabilites for these individuals and come out with very sexy positive numbers

yet these banks nearly went under

it is only a foo.l that will believe in mathematical models instead of sound fundamental anaylsis and good old human instinct

girls like bad guys not emotional crap . go check urself

RixExpat: So Quant FInance is not dying, it is only undergoing professionalism and rebirth.

bros i didn's say Quant finance as a whole is dying. but traditional quant roles are dying

^^^ Quants can take CFA to improve their financial knowledge but i don't think quants will want to work as a financial analyst . The world of fundamental analysis(accounting and economics) is not want interests Quants. The are more interested in mathematics and c++

From my experience, Quants instead usually aspire to be traders because that is where d big bucks is and these are the people that use their models

tanimola22: I am sure the OP would find your submission helpful. By the way, do they employ a thoroughly mathematical approach to risk management in naija? Because heads of risk management departments in naija are mostly accounting or banking and finance graduates.

T22

Guy am sure they have some software running some sort of monte-carlo simulations to determine their Value at Risk.

Even though some of those guys are finance graduate, they would have done FRM or PRMIA so they would understand the techniques . . . no big deal.

The only complexity i see in risk management comes when you have credit or equity derivatives in your portfolio and you wanna calculate VaR. Now you will need to do stocastic calculus to model your Interest rates and your options, do probablity to calculate default probablity for your CDS and also try to figure out some of the variables in your black scholes equation

But nigeria has none of these stuff so risk management will be so easy to do even an accounting graduate wouldnt have a problem

RixExpat: Quant Finance is not all about credit derivatives, stochastic calculus, interest rate derivatives and the likes. Quant Finance takes a rather more mathematical perspective to Finance. It gives one an edge in a variety of areas in finance be it equity research, fixed income, private equity, hedge funds and whatever you can imagine that involves taking a more quantitative approach.

When you take out interest rate modelling, credit default swaps and stochastic calculus. I bet you a graduate engineering kid can handle all the quantitative stuff you throw at him without breaking any sweet.

Also taking out all these things makes it less appealing because these are the areas you get to do the really cool sexy stuff

RixExpat: I beg to disagree that it is a dying field. Quant Finance is seriously employed in risk management of any kind of instrument. Credit derivatives may have slowed down as a result of its abuse leading to the financial crisis especially by those who lack a comprehensive knowledge of the risks embedded in those complex structures. If you have a passion for quant finance (Financial Engineering), please go for it as quant finance has a variety of applications in finance including equity research, fixed income, private equity, hedge funds, etc. Risk Management (which is a part of quant finance) has become the in-thing and an emerging field that has come to stay.

There is a difference btw working as a "Quant" and doing quantitative finance. "Quant" as a career is dying and paving the way to risk managers but obviously risk managers use quantitative techniques to measure risk .

Risk management traditionally has been a conservative middle office function.