Could I Have Been
A parking lot attendant? An Instagram millionaire? I have been lost somewhere in Paris. I have not been a magnet for money, but I'm not writing to lament -- just requesting some enlightenment.
Enjoy some Dave, and read on.
In my late 30's, struggling on levels to move things forward, it's natural to think about what I could have been. For the mindful and introspective, it's unavoidable.
Some are born with a life path. Most people, I think, just try things until something works, then go with it. Others pursue a passion, sometimes successfully; sometimes it's shelved because talent or timing or circumstance has other ideas.
A recent interview, on one of my regular podcasts, tells me: I could have been a great trader.
Super Investors ...and the Art of Worldly Wisdom, Episode 9: Mark Yusko on Gut Instinct (and Why He Says We're Headed for a Crash) -- July 18, 2017
Mark studied biology and chemistry then pursued an MBA right out of undergrad. He entered finance in 1987, a couple of months before "the crash" (and subsequently one of the greatest long-term expansionary cycles in history). He reflects on his career as a series of "happy accidents," and his clear, confident, self-actualized voice reflects this.
During the interview, Mark talked about how investing and science walk hand in hand, and what makes a great investor.
"I really think science training is some of the very best training for investing. Because investing really is about hypothesis formation, data gathering, hypothesis testing, reevaluation, reformulation."
Mark on Julian Robertson of Tiger Management:
He's the greatest identifier/ trainer/ backer of talent I've ever seen. They didn't go for the highest talent. Julian didn't recruit from Harvard Business School and Wharton and Stanford, he recruited from Kenan Flagler Business School and McIntire, in Virginia and North Carolina. He looked for people who didn't go to the top tier but that had done something exemplary in their life, and when he met them they had passion, and his biggest thing was that they were competitive. He loved tennis players and golfers. For him, competition is what this game is all about. He looked for super competitive people who maybe didn't have all the IQ points that some other people had, but they worked harder and they had more heart. And that's what I think separates the great investors."
Science. Check. Not Ivy League. Check. Passion. Competitiveness. Golfer. Hard worker. Heart. Check 5x.
I've talked a lot about timing. How I think mine wasn't great. But, I think talent, opportunity and training can overcome most obstacles. Given timing, that can be a hard combo to capture! (Which brings me to another podcast.)
Chat with Traders, Episode 123: Grit, hustle, intent - and environment w/ Darren Reed -- May 3, 2017
Darren's description of two graduates and one cycle resonated with me.
“Imagine someone that came out of university with a degree in geology from a university in Western Australia in 2002. What does their life look like right now versus someone who came out with the same degree, but just happened to be born 7-8 years later. Their life looks very different. The 2002 guy has had the whole mining boom to grow through the industry when people are going like, 'Man I need you. I just have to employ people. There’s such a boom going on!' That guy can move through seniority ranks very quickly versus someone who comes up with a degree in an industry that’s just dead or stagnated… There’s a lot of luck involved in terms of how the market’s trading at the time, what liquidity is like at the time, what volatility is like at the time -- all those type of things contribute to this beginner’s luck phenomenon.”
The interview prompted me to look at my career in the context of the S&P 500 Index and NASDAQ Composite. Perhaps this format will spark a resume revolution!
The above graphic says a lot, so I won't add more here. I'll just pivot to forward thinking and a third podcast.
Chat with Traders, Episode 125: Getting hired - who trading firms and hedge funds are seeking out w/ Matthew Hoyle -- May 17, 2017
You saw. I took a few shots at Wall Street. Either it was melting-the-f-down at the time, or I didn't have an in. But, do I have a shot now? (For everyone's sake, perhaps I'll put it off.) Matthew Hoyle paints a grim picture for this 38 year old.
“It’s very true that a lot of our customers want to hire fresh grads… There are some good reasons for that: preconceptions, more difficult to go out and find where someone’s gaps in knowledge are, it’s easier to start from scratch. It’s a good thing to show an interest in trading and trading automation (e.g. written algorithmic trading program, written a program to play poker).”
“After 3 years (out of university) it becomes a lot more difficult. You’ve got 3 years out of school to go and figure out if you want to go in the trading direction or not; if you do you should have been doing something which at least has some sort of relevance or utilizes some sort of transferable skill.”
Aaron Fifield asked, "Do you find as someone gets older it does actually get much more difficult for them to land a position?"
“Yes. Within technology, not so. (C++ in demand) Same goes for very heavyweight quants/ academics. Within trading, if you spent 5 years in an arcade doing purely manual type trading, getting hired (by a quant firm as a junior trader) is going to be difficult. Taking an execution-type role in a hedge fund is a better avenue to pursue, possibly with a discretionary carve out.
Aaron asked about skills currently in demand.
“Technology skills are more important. Perform under stress. Good mathematics skills. Be able to script. Know some programming, ideally in C++. Statistics. Machine learning and deep learning (Bayesian methods).”
I have the building blocks. Need to add new, deeper skills to existing set and talents.
“People doing purely manual trading, unless they’re huge, unless they have some sort of special edge, it seems that every year they make a bit less money. It’s fair to say, in general, that type of trading and business is going to become more and more difficult.”
Moving forward, traders must integrate technology to remain viable. Noted, and working on it.
“One thing that’s always going to be in demand is people who are good problem solvers. Nobody is interested in hiring a trader that has one strategy. I want to hire traders that have a track record of reinventing the wheel and coming up with new strategies. As markets become more competitive, the shelf-life of trading strategies becomes shorter, so what you want is someone who has the ability and the energy to go out there and look for new and cool and interesting stuff and put it all together and make it happen, not someone who has a strategy that makes a lot of money, but when it stops working sits around thinking, damn what now.”
“A keen sense of business development is lacking. A natural wanderlust, a desire to explore. I wish I saw more people come along and say, Hey, I’ve been trading this market it works really well, but I want to try and apply it to different markets. Can we move into new markets?”
Talking my language!
A recent Jon Boorman tweet, the second one as it appears below, summed up my experience with the markets (and poker over a shorter time frame).
We do well in school. Think we are studied and know how to learn, that success should be a byproduct. But, good things may not happen until we are ready.
Lead image source: Google Search. Assuming Creative Commons license until I learn otherwise. Modified.