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RFMontraz
NP Italian Stallion

Total Posts: 2019
Joined: Mar 2004
 
Posted: 2006-10-31 20:53

My turn: Milken! Cohen! Err... Icahn! Pickens! Boesky! Meriwether! Wait... Gekko! Uhh who else.. That guy smoking a cohiba on the cover of trader monthly!


Mistah RFMontraz - He dead.

gunboatdiplomat


Total Posts: 5
Joined: Oct 2006
 
Posted: 2006-11-01 21:06
N/A

rowdyroddypiper
NP Wrestling Champion

Total Posts: 1181
Joined: Apr 2004
 
Posted: 2006-11-01 21:51

Gunboat, do you know what a market maker is?  I don't think that Milken was a market maker so much as he helped birth a new market.  Big difference. 

Did you get the New/Market Wizards two for one pack on Amazon or something?

Kovner, Trout, Lampert, Mindich are not academics, none of them hold advanced degrees.  Not to say that they aren't smart guys, they're just not quants.  I don't see how including this list of people addresses the points that Stork and FDAX have made.  Plus there are plenty of smart guys that have gone belly up, they just don't tend to get interviewed for books. 

 

 


We are awakened with the axe, night of the living dead at last

gunboatdiplomat


Total Posts: 5
Joined: Oct 2006
 
Posted: 2006-11-01 22:50
N/A

rowdyroddypiper
NP Wrestling Champion

Total Posts: 1181
Joined: Apr 2004
 
Posted: 2006-11-01 23:30

Dude, ex-post rationalization.  That is your selection method.  You are not going in, looking at a sample of people that you would consider intelligent and look at their results.  You are looking at results, seeing these people are successful, consider them intelligent and are equating the two.  Was the point made that intelligence precludes success?  No, the point was made that the best traders are closer to average intelligence than s00per genius level.  Call it Wil-e-Coyote syndrome, I've seen very bright people get massacred on trades via excess complexity. 

None of them were/are anything to write home about academically.

See, the advanced degree thing was based on this.  I mean I don't know what one would write home about academically, but I was assuming that you meant smart, in an academically credentialed way.

Milken may have 'helped birth' a new market, but he also played a market making role. 

Please define market maker for me.  It should be in chapter two of your capital markets text book. Seriously, are you really going to hold onto this notion that Milken was a market maker?  Do you mean to say he facilitated commerce?  Wow, amazingly enough that's what every trader does.  You know Lampert's big trade at this point isn't some high frequency stat arb play, it's repositioning K-Mart.  Very quantitative indeed.


We are awakened with the axe, night of the living dead at last

gunboatdiplomat


Total Posts: 5
Joined: Oct 2006
 
Posted: 2006-11-01 23:57
N/A

kr
Founding Member
NP Raider
Total Posts: 3561
Joined: Apr 2004
 
Posted: 2006-11-02 00:01
yessssssssssssssssssssssssssssssssss

Actually it's just as well that Milken came up.  What I see these days is that it is ultimately about building a business.  Unfortunately you cannot build a business trading flow equity or flow TRACE-listed bonds or things like that - there's no money to make there.  What you CAN do is see what people have done before, and think about the people you know, and figure out how to bend the existing reality to fit the network you either envision or, better yet, have in your list of social contacts, and start printing money off of that.  Milken is a hero basically because he is an exquisite example of that, going way off road to print money. 

What I think about all of this is that the athletic metaphor is not a good one - but that's partly my bias.  There are people who make money selling sports caps at football games.   They know the crowd and the crowd's psychology (sometimes as manifested in a quantitative way).  I think it's cool that some people can make money off this, but in terms of business I live on a pretty remote island and don't have much of a sense how it is to serve the teeming crowd.  But the takeaway is that guys like Hitler also had the same skill, and they weren't known for being geniuses in the usual sense.  'Psychopath' is probably a better term, and might describe some traders I've known. 

Come to think of it, I haven't met many quants who aspired to be psychopaths, though there were indeed a few 'naturals'. 

But there is a lot of other business to do, and it doesn't mean you have to be in the trader's capital city to carry it off.  In what I do, I think athletic skills would possibly be the worst metaphor you could conjure up. 

Anyhow, back to the original point.  Think about business owners, especially the guys who got rich.  Some had egos so big that that they wrote books (ok, they had books ghostwritten, fine.)  But they are pretty commonplace folk and I am sure you have met them.  Some would be thrilled to have a steak at some shitty diner.  But they are mad about their business of selling brass-plated keychains at state fairs, and they might make an embarrassingly steady business out of it.  One that might generate the cash you envy.

Anyhow, it all boils down to David Carradeen's 'Grasshopper' - if you are still asking the question, you're stuck, so don't bother. 

(And by 'the question' I don't mean, why is some loser white guy acting as the Kung Fu star.)

my bank got pwnd

rowdyroddypiper
NP Wrestling Champion

Total Posts: 1181
Joined: Apr 2004
 
Posted: 2006-11-02 02:58

He takes a quantitative approach, yes. Read up on him, you might be interested.

Thanks for the tip slick.  Before this devolves into a flame war please see the link here.

UBER QUANTY trade there.  A guy that buys up stakes of companies and forces management change, doesn't really sound like he's employing a quantitative strategy. 

The IQ thing is a non-issue.  85th percentile for IQ is roughly 117.  99th percentil is 135.  The difference in your assesment and the original (130-140) is the difference being the smartest (as measured by IQ) person in a room of 100 vs being the smartest in a room of 7.  Can you see the difference now?  Assuming you are an undergrad at a not tiny school, you may have classes that range from 20-100 people.  It's the difference between being one of the top 3 performers in your small class vs. being the top performer in your large class. 

KR, if you hit the link, Lampert talks about (in very broad terms) the K-Mart repositioning.  He makes a good point about CEO as owner vs. CEO as politician.  Agency problems are huge and being able to remove some of the friction that the principal/agent relationship creates is something he feels will unlock a lot of value.  It's short, but it's a decent insight.

 

gunboatdiplomat, it's nice to see that you are a superstar trader fanboy, but as you said, the fact that you've never done a trade in your life is all I really need to know.  It's not that I don't think that people with no experience have no value, they just have no value on a subject where the best information is in experience, not autobiographies.

 

 

 


We are awakened with the axe, night of the living dead at last

tabris


Total Posts: 1255
Joined: Feb 2005
 
Posted: 2006-11-02 03:59

I am still stuck.

So what exactly is this mysterious thing with supposedly super genius IQ, aka trader, again?


Dilbert: Why does it seem as though I am the only honest guy on earth? Dogbert: Your type tends not to reproduce.

rowdyroddypiper
NP Wrestling Champion

Total Posts: 1181
Joined: Apr 2004
 
Posted: 2006-11-02 04:37
I think the point was made that good traders are generally closer to average in IQ than they are to Super Genius (let's call Mensa cutoff of 131 super genius).  There's some dispute regarding this as a group of people that may or may not be super intelligent (from an IQ standpoint) have made a lot of money in the past.  I think maybe if you could plot P&L on the Y and and IQ on the X you wouldn't necessarily be able to draw a neat upward sloping line. 

We are awakened with the axe, night of the living dead at last

entaroadun


Total Posts: 8
Joined: Apr 2006
 
Posted: 2006-11-02 05:17
Wow... I mean, wow...

I'd just like to point out that my analogy of athletic skills didn't mean pure physical prowess. I'm talking about tacticians on the field. There's a difference between quarterbacks and linemen, though both are athletes. The type of decision making that quarterbacks have to make for a good play is the type of non-academic intelligence that serves people well in business in general, not just trading.

If 140 IQ were all it took to mint money at flow or prop trading, then sign me up!

RFMontraz
NP Italian Stallion

Total Posts: 2019
Joined: Mar 2004
 
Posted: 2006-11-02 10:18

quantnoob: I'm pretty sure there have been a very large number of successful traders with IQs in the 140s if not 130s

And I'm pretty sure you have no idea what you're talking about. (FDAX)

I named some traders in response to this. They are definitely above average intelligence, mainly by a long way. They don't hold advanced degrees, but that's not the point. The point is they don't work off 'gut instinct/skills.' They're also some of the 'best traders'.  (Some are in (New) Market Wizards, not all of them are.

-------------------------

I’ll keep it short, RRP said it all already.

My point to you was that the people you named have only one thing in common: popularity and coverage by the "financial" [sic] press. This is if we consider Trader Monthly – probably the magazine I despise the most on earth – financial press (and we don't). BTW Simons doesn’t hold any advanced degree? Are you sure about that?

If your point was “you gotta be smart to make money in this game” dropping the names of few selected guys all wannabes dream about is not gonna prove it. With that list you mainly wanted to show some knowledge of the industry, like you are in the loop or something, and I thought that was pretty… well, who cares.

Name dropping ain’t cool, that’s all.


Mistah RFMontraz - He dead.

Baltazar


Total Posts: 1765
Joined: Jul 2004
 
Posted: 2006-11-02 10:25
"Name dropping ain’t cool, that’s all."

exept if my name were on the list Tongue out

Qui fait le malin tombe dans le ravin

chiral3
Founding Member

Total Posts: 5060
Joined: Mar 2004
 
Posted: 2006-11-02 13:34
Actually Balt, someone I work with just dropped your name to me two days ago in a completely unrelated discussion.

Nonius is Satoshi Nakamoto. 物の哀れ

Baltazar


Total Posts: 1765
Joined: Jul 2004
 
Posted: 2006-11-02 13:56
now you get me worried

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kr
Founding Member
NP Raider
Total Posts: 3561
Joined: Apr 2004
 
Posted: 2006-11-02 22:35
rrp - thanks for that, never heard Eddie's discussion on the KM business.  It's a bit like what you and I discussed before re: CMBS - choosing selectively, one doesn't lose money on credit.  We used to argue the same thing:  If you can identify dysfunctionality, AND you can use your financing capability as a sledgehammer, then you can make money in distressed situations.  Guys who are holding up the process need to be dragged out of the way.  Especially if it is a loser commercial bank, who financed at par and has lost 80, there is minimal incentive to act.  In reality, the situation is a lot more complicated than Eddie explains though, b/c the company's competitive position may also be terrible - you have to be very sensitive to that, otherwise you really are losing money on credit.

But back to the regularly scheduled programming... What I think is that the genius to speak plainly - like ESL - isn't measured by IQ, because to twist Mr. Binet's words, 'that is not what his test measures.'  Anyhow you know I like MJW for the same reasons - I've mentioned 'aggressive conservative' here before, and not as a squinty-eyed reference to 'Rumsfeld/Cheney.'

my bank got pwnd

Jurassic


Total Posts: 133
Joined: Mar 2018
 
Posted: 2018-08-24 21:30
> I imagine the vast majority of traders are basically flow traders. I've never had the slightest desire to do that for a living.

Why not?

katastrofa


Total Posts: 458
Joined: Jul 2008
 
Posted: 2018-08-25 01:39
For a trader working within a larger institution, the ability to win political fights over resources can be as important for success as 10 additional IQ points.

Osiris2


Total Posts: 21
Joined: Sep 2017
 
Posted: 2018-09-08 01:44
More like 40!
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