Saturday, 23 May 2015

Rembrandt selfies or selfie sticks?

09:26 Posted by The Thalesians (@thalesians) No comments

Wandering through the city of Amsterdam over the past few days, it was difficult not to appreciate the grandeur of the past, and to make comparisons between the past and the present. It can sometimes be tempting to think that the old times were truly better. Where once a "selfie" was an evocative painting by Rembrandt or Van Gogh which now hangs in the Rijksmuseum, today, it is the product of a selfie stick, which is now banned in most museums. What starker contrast can there be between the past and the present?

In Amsterdam, the bridges, the canals, the cobbled streets: it all comes together to create a very picturesque view of the past. It is of course only a partial snapshot and a somewhat skewed one at that, which has been preserved over the ages. The difference is that everything around these preserved streets has changed. The canals are no longer arteries of commerce, but of tourist boats. The pathways surrounding them are clogged with cars as opposed to horses and their carts. What has been less than picturesque about the past, has been erased, the physical toil, the lack of healthcare and a society which was significantly more violent.

We need not purely look back over the ages to have a rose tinted view of the past. Even within the space of our own lifetimes, we might lament the passing of time. Indeed, in the industry of finance, this is no different. My career has been comparatively short, around a decade, yet, it is just about long enough, for me to make comparisons about how the industry has changed.

My main reason for being in Amsterdam, was to attend the Global Derivatives conference. One of the panels discussed this very point, about whether the past was indeed better in finance, in particular for quants. The panel consisted of a number of very well known and experienced quants.

It was noted that the job of a quant has changed over the years and the finance industry itself was reducing in size. Where once quants purely used mathematics to price options, in recent years, maths skills have become more important in other areas such as systematic trading. The panel seemed largely in agreement that the past was a more fun time to be a quant. Alex Lipton, of BAML, in a light hearted comment, suggested that the reason being a quant was more fun 20 years ago, was because everyone was 20 years younger, which elicited audience applause.

I have to agree with Alex's point. Very often, the more emotional reasons for wanting the past, can somewhat overshadow the more practical reasons in favour of the present and indeed the future. Indeed, I feel that it is a very exciting point in time to be a quant. It's purely that, the "new" areas for quants before, like pricing options have become more mature and established fields. The area of systematic trading, whilst it is hardly new, has become a bigger focus for quants and creating new questions to solve. Indeed, not every problem has been solved in quantitative finance. The recent financial crisis, suggests there is a huge amount of work left to be done.

For the past, our memories do a wonderful job of scrubbing away the less desirable, whilst in the present, problems cannot simply be "unmemorised" and have to be confronted. Let's celebrate glories the past, but remember, that just like today, it was not perfect.

(I shall be publishing a full takeaway of my quant thoughts from Global Derivatives 2015 over the next few days. It has been kindly been sponsored by the team at Global Derviatives and hence the full version will be available. Let me know if you'd like a copy! Also a summary of my tweets from the conference can be seen here)

Like my writing? Have a look at my book Trading Thalesians - What the ancient world can teach us about trading today is on Palgrave Macmillan. You can order the book on Amazon. Drop me a message if you're interesting in me writing something for you or creating a systematic trading strategy for you! Please also come to our regular finance talks in London, New York and Budapest - join our group for more details here (Thalesians calendar below)

27 May - London - Gaining the alpha advantage in vol trading - Artur Sepp
29 May - Prague - Trading Thalesians book talk / Interactive FX intraday demo - Saeed Amen / The Thalesians (tickets here)
03 Jun - Frankfurt - Trading Thalesians book talk / Python FX intraday demo - Saeed Amen / The Thalesians (tickets here)
17 Jun - London - Using Python to build trading strategies - Man-AHL & Saeed Amen
18 Jun - New York - Dr. Tim Leung - Exchange-Traded Funds and Related Trading Strategies - IAQF-Thalesians


Post a Comment