Careers in Systematic Investing: Advice and Perspective at the End by Matthew Granade
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Careers in Systematic Investing by Matthew Granade, former head of Research at Bridgewater Associates and co-founder of Domino. This presentation was part of QuantCon 2015 hosted by Quantopian. Visit us at: www.quantopian.com.
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Careers in Systematic Investing: Advice and Perspective at the End by Matthew Granade
- 1. So you want to be an investor QuantCon 2015 3.14.15
- 2. What is inves;ng? Why is it interes;ng? 2 Observe the world Formulate hypotheses Test
- 3. So you want to be an investor… 3 Are you inves:ng right now?
- 4. 4 Do. Or do not. There is no try. So you want to be an investor…
- 5. Opportunity is everywhere 5 Ideas Data Tools Execu:on
- 6. What do you need to decide to be investor? 6 1. What is your style? 2. How will you manage the piIalls? 3. How will you compound?
- 7. 1. What is your style? 7 • Long/short • Equi:es • Fundamental + technical • Discre:onary • 50+ porIolio managers w/ one ‘uber’ PM • One month horizon • Long/short • Bonds, currencies, commodi:es, equi:es • Fundamental • Systema:c • 1 “porIolio manager” • Six month horizon Fund “P” Fund “B”
- 8. 1. What is your style? 8 “Where would you put your money?” Mr. Ackman asked... “Let’s say you were to buy one asset, or one stock, or one market, or one currency.” There was a pause. “I don’t do that,” Mr. Dalio said. “O.K,” Mr. Ackman said. “I’m sorry,” Mr. Dalio said. -‐ From Feb 12, 2014 interview at Harbor Conference, New York
- 9. 1. Dimensions of style 9 • Long only vs. long/short • Asset class(es) • Strategy, e.g., - Fundamental - Technical - High frequency • Discre:onary vs. systema:c • Concentrated vs. diversified • Investment horizon
- 10. 1. Lot of style choices, some of them good 10
- 11. 2. Prepare to be wrong. 11 "It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong.” -‐-‐ George Soros “If you can’t understand it, don’t do it” -‐-‐ Charlie Munger “Anything can happen in stock markets and you ought to conduct your affairs so that if the most extraordinary events happen, that you’re s:ll around to play the next day.“ -‐-‐ Warren Buffeg
- 12. 2. The risk of blowing up 12
- 13. 2. Get yourself in the right headspace 13
- 14. 3. How will you compound? 14
- 15. 3. Record your history, learn with ;me 15 • What trade did you make? • Why did you make it?
- 16. 3. Learn from others 16
- 17. What do you need to decide to be investor? 17 1. What is your style? 2. Are you prepared for the piIalls? 3. How will you compound? Repeat un)l rich.
- 18. A par;ng thought… 18 “Never give up searching for the job that you’re passionate about. Try to find the job you’d have if you were independently rich. Forget about the pay. When you’re associa:ng with the people that you love, doing what you love, it doesn’t get any beger than that.” -‐-‐ Warren BuffeF
Hinweis der Redaktion
- A little intimidating to be giving career advice … Who am I … --McK --Co-Head of Rsch at Bwater
- There is a truth-ness to investment … where you really get to learn something.
- Lots of people come up to me and say … I want to work for a hedge fund what advice do you have? This is the question I ask them. I didn’t think I could be at a conference on qaant investing … on pi day of all days … without a star wars joke.
- If you’re not doing it today you’re kind of full of it.
- And part of the reason for that is it’s easier than ever … --You can paper trade … so many options.
- Both very successful … managing
- Bill Ackman Two very different styles. Both successful … though one might argue that one is more successful than the other … but still What I like most is Ray knows his style
- So how do you find your style. I think the answer is I don’t know. But I think it’s a bit like trying to find yourself as an artist. You’re drawn to a certain approach … so do it. Though there’s also something like a man and a moment.
- Investing is also great because you’re often wrong so almost all investors have reflected deeply on what it means to make a mistake. So each of these guys makes a different point around mistakes – and various points about risk control. You want to survive … And you want to learn from your mistakes.
- I want dwell on this but diverification is a key thing to think about. But just think back on the Ackman Dalio debate … and they have various big views on this topic. So the question is what’s your view?
- The other thing I’d say is that great traders know how to stay centered. Last week I was on the floor of a big fund … “Look at him … sitting there as cool as a fucking cucumber.”
- The general point here is that you want to learn from what you’re doing – I think compounding is very valuable. If diversification is the only free lunch. Compounding is like the only real magic in the world. Learn get better learn get better. Expectations – always know what you think will happen. Always know whether you did what you thought you were going to do.
- Ray – writing down his trades … That’s what lead him to the insight around writing his logic in code. But even if you don’t want to go that far there are plenty of other reasons to write it down and really study what you’ve done.