Why do you need a Ph.D. to do wuant?
Vincent Granville
> Nasdaq trend. The strategy associated with the forecaster has been
> analysed on our web site. Check our section on universal keys.
> Even with a 56% success rate in predicting the trend, the long-term
> (non compound) yearly return before costs is above 40% in many
> instances. Note that we provide similar strategies that do not rely on
> the open price to interested clients. As with many trading strategies,
> the system sometimes exhibits oscillations in performance. It is
> possible to substantially attenuate these oscillations, using a
> technique described on our website."
>
> You know, that's plain crap. It's doesn't matter even if you have a
> 99.99% rate of success if the 0.01% that fails generates more loses
> than the combined 99.99% gains.
Don't you think I've thought of this long ago? People posting on this
board - including myself - have more intelligence than a 7 year old kid.
My Ph.D. is in statistics from a top University. As a matter of fact I
have strategies that fail 95% of the time and are still profitable. Note
that my strategies change all the time to include newly detected
patterns and cycles that no one else is yet taking advantage of. That's
the creativity part that most Ph.D.s lack, as I mentioned in my previous
post. One of my favorites is detecting short squeezes on certain types
of stocks. You can make 25% return in 5 days :) Another one is robust
cross-correlations with time-lag, involving two similar stocks and one
index.
Of course to find many patterns, you need to trade a lot with YOUR
money - at least $50k. Very few Ph.D.s have this experience -- plus they
tend to be overly theoretical. But that's good for me - it means they do
not really compete with me on the stock market. My toughest competition
might come from uneducated but experienced brokers actually, not from a
quant working for an hedge fund.
To get a quant job, you must pass exams (series 63, heavy C++) that only
people very good at memorizing tons of boring stuff can succeed. These
memorizing skills are incompatible with creativity, they are just
located at the other spectrum in the intellectual domain.
And because of statistical arbitrage, if you are not using undiscovered
patterns for trading (due to lack of creativity) you can not sucessfully
compete since you use strategies already used by your competitors.
--
Vincent Granville, Ph.D.
Strategy Architect & Founder
Data Shaping Solutions, LLC
http://www.datashaping.com