Why I Dislike Talking About Trading and Investing (TT - S2E8)
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- เผยแพร่เมื่อ 7 มิ.ย. 2024
- As someone who works in quantitative finance and runs one of the largest TH-cam channels dedicated to quant finance, everyone wants me to talk about trading. First off, I'm not a trader and don't work for an investing firm. But the main reason is that everyone has an opinion on trading that they think is a fact. You really have two different camps and both are non-sense.
The first camp are the business people in traditional finance. They worship Warren Buffet and think you can simply look at cash flows to determine an assets value. They also like to create fairy tale futures about companies and why they will be worth a lot or nothing...even if it contradicts their simple cash flow theory.
The second camp are the quants or nerds. They bring in massive amounts of data and apply models blindly to everything. Once they get a number they are determined it must be a fact. They also want to tell you all about how smart they are because they do math.
The problem with quantitative finance is that we're modeling people and guess what...people aren't easily understood. Finance, economics, politics, and quant finance are all soft sciences that are based on people making decisions. I enjoy discussing the businesses in detail but realizing you need data and statistical theory to also support your ideas. I work in risk management so I need to try and find every reason why my idea is wrong. That's right! Look for what's wrong, don't look for why you're right/ Confirmation bias is one of the biggest flaws the human race has. So in summary...I just don't like talking with people who are over confident and lack enough real world experience to have an educated discussion about trading and investing. But who knows, maybe I'll add a few more videos on the topic.
Podcast version:
fancyquant.buzzsprout.com
BUY MERCH:
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I grew up in a culture where a bachelors degree meant you were successful. After attaining my finance degree, I realized that I am at the very beginning of success. People ask me what to invest in because I’m a financial analyst.. for loans.. at a bank... even if I was a financial analyst for stock, I still would not give out any advice because of all the reasons you stated in this video. If I haven’t personally spent any time in any financials for a company, why the hell would I give advice? Better yet, why would I advise you FOR FREE if I did all this work researching which stocks to invest in?
That was an amazing video, thanks for all your effort Dimitri
I personally would love to see more technical videos!
Nice video. BTW, thank u for the playlist of R. I really liked the programming language
Hi Dimitri, once again a really a great video! I really wanted to know that do I have a New York/Chicago to be a quant? I know that these are the biggest cities to work for in finance but I really wanted to move somewhere like SF/LA. I really love math/stats/CS and want to be a quant but the location makes me want to shy away. Hence, are the best jobs only found in NYC/Chicago? That'd really help me decide if I want to be a quant or focusing on machine learning/data science. Thanks in advance!
I have been eagerly waiting for more trading related videos from you! I agree with most of the points you covered in this video. However, I don't think you should avoid talking about a topic because people are uneducated or don't have a good understanding. I am sure a small percentage of your community is capable of understanding the intricacies involved with financial markets.
Dimitri, I would love for you to interview Benjamin Cowen and Patrick Boyle. Both are youtubers that make quantitative finance videos. In my opinion, they are some of the brightest folks on the platform. I am sure you would have a thought provoking discussion with them.
Anyway, for those looking for resources, I frequently reference the following when I am practicing quantitative trading/analysis:
Benjamin Cowen's youtube channel: th-cam.com/channels/RvqjQPSeaWn-uEx-w0XOIg.html
Hands down on the best TH-cam channels related to financial markets. Ben focuses on data science and creates risk models/indicators to better understand different markets. His primary focus is crypto, but he also covers commodities and equities.
Patrick Boyle's youtube channel: th-cam.com/users/PatrickBoyleOnFinanceabout
Patrick Boyle is a hedge fund manager, a university professor and a former investment banker.
This channel is all about quantitative finance. By subscribing you will see videos explaining what is happening in markets right now, you will learn about financial derivatives, how traders use quantitative tools like statistics and corporate finance.
He has a couple of books out that are pretty fantastic. I highly recommend buying Statistics for the Trading Floor.
Quantopian: www.quantopian.com/
This site is a good starting point for anybody looking to get a better understanding of quantitative trading. They have an informative forum, excellent lectures, and exercises to help you get started.
Lastly, for those who think that quantitative trading will be a walk in the park and that they will become rich overnight. I suggest they read The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution.
Jim Simons might be the greatest trader to ever walk the face of this planet and I aspire to be a fraction as good as was.
Mr. Dimitri, thank you for this video. As an amateur "investing enthusiast" this talk ties into the your previous video - Risk Management Has Lost Its Meaning (TT -S2E2); I want to learn more about risk management & truly be aware of my risk-adjusted returns - but there are so many different definitions of 'risk' out there that I fail to understand how to go about prioritizing learning about 'risk'. Even the term 'market risk' means different things to different people & I don't know how to go about learning more about it in a way that is relevant to /focuses on what I'm trying to do.
I'll consider making a video on this as it has been on my mind. It would take me quite a bit of work to put together though.
@@DimitriBianco I may be able to help you get started on this. Personally, the biggest barrier to self-learning about these topics is my inability to think about quant risk the way a quant would - my understanding is too hazy & abstract. I can look at formulae & theory all day without truly grasping what risk is wrt its "real-world logic & impact". As a contrary example, when value investing instructs me to discount future cash flows to come up with an intrinsic value & then buy at a discount - I clearly understand the inherent "real-world logic" in it's line of thinking. Thank you for considering making an elaborate video, but please do not do so (full time job & young kid iirc). You don't have to lead the horse to the water, just talk about what water is and isn't - and we'll try to figure out the rest. I hope I haven't been talking outa my ass.
Hey Dimitri, ever since I started working in Model Validation, I started reading Risk Model Validation by Peter Quell, do you think reading model validation books is a good way get ahead of the competition?
Hey Dimitry! Thanks for another good episode!
My pleasure!
Hi Dimitri, What is your take on the CQF program compared to other MFE degree and Econometrics in general.
I check and see that content that they cover generally lack a bit of statistics like Time Series Analysis but cover a lot of topic in Quant Finance like volitality modelling and derivatives pricing...
I was in a room with a trader and he said this stuff. He said most of us don't have the info or know how to be super successful. However, his class is constant and he goes over what guys in the firm talk about. There is just stuff out there we are not privy too. Legal and illegal. Edit: Because of watching you so much, I have started giving the idea that trading may not be a walk of life I can do as I wish. I have been thinking that there may be other ways.....
whats ur view on Master in mathematical finance at university of Toronto?
I have studied finance for many years to end up with an etf portfolio 😁
15:30
Hello sir, can you please give some examples of quantitative strategies that you find really good, and have given good risk adjusted returns? And what all parameters or factors do you consider while making a strategy?
love the video Dimitri, i can see you’re not a fan of the trading culture. Is this the reason you never went into trading?
Video on backtesting and modeling market risk?
lol
yes and i agree that risk contents are necessary validation of people's preparation (or devotion
thx for sharing.
just curious if you are watching cryptocurrency derivatives as well? thx.
One of the best videos on your channel, Dimitri. I liked it very much.
angry bear ! lol government has made market an environment to provide liquidity and bring pain to most participants
Shit starts at 4:58. This would make a perfect intro btw.
response to anyone who says that: 7:36
Why haven't you go to IB
Different work. Not everything in finance is about IB or bust
15:30 is a pretty important point. i've only been trading independently for about ~10 years now, but i've never had a "golden egg" alpha signal that's lasted more than a year or two. i do have 1 bread and butter that's fairly resilient, but it's by no means producing my primary source of income. i'm running about 7-10 strategies simultaneously at any given point in time, but as soon as my monitoring of any one of them falls below a certain performance metric, i immediately retire them to the back burner until by luck the identical conditions and opportunities present itself for the chance to use it again (which is quite rare). i'm always researching full-time to seek new alpha and always on the lookout for market anomalies or patterns even when i'm not actively working. because once theta decay or any other reason for collapse in a signal's efficacy hits, you had better be prepared lest your performance and consequently your profits disappear.
so finance is sham?
"Don't be stupid!"
Dimitri Bianco.
Great video!
Great video, please talk more about technical stuff in trading/investing. Most channels just wanna sell their stupid product to people.
I found two profitable models now Im here worrying till when are they gonna be profitable , so Im reading market seasonality detecting models (found a lot of Markov Chain) trying to figure what is happening , and it pains me to see so many people take market so lightly and put their capital at risk.
i find finance boring but the math+programming interesting
And the numbers increasing at the end is fun too
100% argee
btw this videos reminds me the time when I used to sub every number I saw in the physics question into the formula that I dont understand and gamble to see whether this gonna generate the correct answer XDDDD
It takes forever to prove that you are almost right, but just one moment to prove that you are absolutely wrong.
stop talking about mathematical rigor like you have a math phD. yeah you probably know more about math than a traditional finance major but stop acting like youre high and mighty understanding rudimentary math behind your little time series models
Robinhood failures settled this discussion for me. One poor kid was down 700k and committed suicide. 90-95% of people doing ‘trading’ or whatever have no idea what they’re doing. Most powerful income tool is your salary - hands down.
That 700k kid didn't lose the money, he was just trading with instruments he didn't actually understand and mistook the number as a loss.
@@69ms I know, that’s more so the point of my comment. He saw “down 700k”, didn’t understand the tools, and panicked.
Agree 100% its a shame actually people think they can watch some videos and understand how markets operate.