Sunday, December 04, 2011

I, quant

A commenter linked to this Guardian interview with a UK quant. I found a number of his comments interesting enough to post here. See the original for more detail about the software he develops. I always felt that if I went into finance it would be as a trader, but with quant skills ;-)

"My parents discovered that I was of a mathematical bent aged three when I was apparently lining up my toys in order of size and then colour. I was one of these terrible, precocious kids who did their mathematics O-level aged 12. After a long academic career I ended up doing theoretical physics for my PhD, and spent a couple of years at Cern in Geneva. Many people I know from back then are still at universities, doing research and climbing the slippery slope to professorships and fellowships. They work the same astonishing long hours as I do, yet get paid a fraction and, from a purely scientific perspective, get to do some really, really interesting science. I often say (only half jokingly) that I "sold my soul" – I make a little over £200,000 a year, including my bonus."

"I said I was a quant, derived from the word 'quantitative'. We're the people of a definite mathematical bent, and if you're looking for a warrior-like analogy, we are perhaps the "armourers" of the financial industry, or, let me think … Traders are the warriors of our world; they go out and fight. I think of them as 'egos on legs'. Sharp suits, looking very smart… We quants are the trader's brain. It's our model that defines not only the risks the trader can take, the model also calculates how much risk he is taking with his particular trades at any given moment and we also predict future movements in valuation, pricing and the like."

"I have been in banking for over 20 years, and for several years I was with one of the major international investment banks. I discovered that I am just not enough of an arsehole to make it there. Why the top people at investment banks are like that? Well you have a thousand vice-presidents vying for 10 managing director posts. What do you think will happen? People will do anything to get ahead, back-biting, back-stabbing, the whole nine yards. For those of us who find life surrounded by other people difficult enough as it is, the requirement to network is hellish."

"Not sure though that I'd voluntarily swap IQ points for EQ – even though I'm certain that I'm going to end up as one of the single old blokes that you might occasionally come across – nice, big house in the country, lots of dogs, materially comfortable and yet utterly alone and mad as a fish.

Later, when asked to elaborate on that final point, he responds via email:

"I've long been aware of the prospect (with some 'tongue-in-cheek') of becoming mad as a fish, and the attractiveness of the current imbalance between EQ and IQ is that I know that my biggest, deepest fear is failure. With the current imbalance, I know that the risk of failure is reduced to its current level: eg, small but still real. That fear of failure drives me and means that I know I'm giving up anything approaching EQ in pursuit of avoidance of failure."

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