Have you become exceptionally good at anything, and if so what and how?
jobe_smith
can you explain your basic business model? Also, what is the hardest part of your business and/or the biggest barrier to entry?
I’ve worked in high frequency trading in Chicago as a trader and developer for 11.5 years. I am an expert on that stuff. AMA.
I don’t understand how P(Simulation) can be so much higher than P(God) and P(Supernatural). Seems to me that “the stuff going on outside the simulation” would have to be supernatural by definition. The beings that created the simulation would be supernatural intelligent entities who created the universe, aka gods. How do people justify giving lower probabilities for supernatural than for simulation?
For a particular use of time to have zero opportunity cost.
Mostly when people talk about opportunity cost, they mean the cost associated with forgoing a different option. So, if you sit on your couch and watch TV you are forgoing working at Jimmy Johns for $8/hour. That’s your opportunity cost. It doesn’t go to 0 just because you are immortal.
But I think I know you what you mean. You want to feel like you have plenty of time to do everything or nothing. You don’t want to feel constrained by a limited lifespan. If that is how you feel, then I think its more of a psychological issue and can be dealt with directly. You don’t need to need to become immortal to stop worrying about not having enough time to do everything you want to do in life. You just need to stop worrying.
Seems reasonable for general elections but what about primaries? A lot of people changed their mind about Rick Perry after his debate performances in the 2012 republican primaries. If better debates during the primaries produced better candidates from both parties, that seems like it would be a win.
I’ve worked as a trader/quant/developer for coming up on 12 years. Joe Mela’s post at 80,000 hours basically matches my experience. I’ll also point out that a large portion of trading firms are in Chicago, where the cost of living is really not too bad.
High frequency trading is a candidate for a sector of finance that makes money through buying and selling stocks a little bit faster than others, without contributing much social value.
I think that this is a bit of a misunderstanding of what HFT does. A lot of HFT firms spend significant resources trying to be fast, but they do that because a lot of other HFT firms are also spending significant resources to be fast, and are pursuing very similar strategies. Speed is all about competing with the other trading firms, not about being quicker than end users. The strategies that HFTs are pursuing are socially valuable (typically, market-making and/or arbitrage), and they are competing along multiple dimensions, not just speed. Speed typically doesn’t become important for a given strategy until competition has forced profitability per trade down to a minimal level. Once the bid-ask spread cannot get any tighter, then speed becomes an important factor but not until then and getting those spreads down is clearly valuable to end users. The pursuit of speed is “wasteful” in that it is costly and the end users don’t really care about it, but the costs have to be born by the trading firms themselves. They can’t pass those costs onto end users by increasing spreads because price priority beats time priority. The firm that tries to be super fast but at noncompetitive prices just won’t trade.
More than 100% of my profit’s are from market making. Overall, I lose money on my positions. For the firm as a whole, position trading might be slightly profitable.
I have a basic strategy that works, and I run a couple variants on that strategy on a decent number of products. I am always trying to tweak the strategy to make it better, and add more products to trade. I also put some effort into developing new ideas. Most of the time, new ideas are a waste of time. There just aren’t that many fundamentally different strategies that work, and that provide the kind of risk/return profile that works in my industry. I know it is a cliche that you learn more from failure than from success, but in developing trading strategies I think the opposite is true. You can spend forever trying things that don’t work. Its much more valuable to understand and refine an idea that basically works.
I have a few thoughts on this:
The way to get into finance is to go to a top college and major in either business, economics a hard science or engineering discipline. There are people who take other paths, but that’s the main way to go. Financial firms are typically not overly concerned about specific college majors. I personally did Physics + Econ, but Comp Sci + Econ would have worked just as well. The point is that you can pick a major that is valuable outside of finance and still pursue a job in finance. That way, if finance doesn’t work out you will still be fine.
You don’t generally go to business school straight out of college. Typically, you work for a few years first. So, the “sunk cost” of a finance career is only the cost of college. That compares favorably with being a doctor or lawyer, and is similar to becoming a software developer or something like that.
If you can get an elite finance job (like analyst at Goldman) straight out of college, it will look good on your resume no matter what you do afterwords. If you can’t get an elite finance job, but can get some sort of finance job, things change a bit because different areas of finance have different levels of transferability of skills. If you go into a particular niche and then wash out of it or just want to do something else, you might find that your experience is not that valuable.
My particular niche in finance (trading) has fairly crappy transferability of skills. What I do does not teach a lot of general “business” or management skills. There are 2 ways to deal with this issue. One is to only go into trading if you are very confident that it is your true calling. That way, being able to do something else is a moot point. The other is to start out as a quant or programmer. Learning how to program and how to do data analysis are very valuable skills in lots of fields. Finance is one of the best paying fields for programmers and working as a programmer will allow you see how trading works. A lot of traders worked as programmers first. Here is an article about it that features a friend of mine.
I am not a huge fan of “earning to give” and I’m not sure that finance is the best place to engage in that activity anyway.If you want to save lives you could become a doctor and save lives all day and still make enough money to donate to saving more lives. Most people who succeed in finance are intensely interested in money. We have to spend all day thinking about minute details related to making money. Most of the spouses of my colleagues (including my own) have almost no understanding of what we do. They just find it too boring to think about. Having a career that you find boring is a good way to be a miserable person and mediocre at what you do.
I think you are correct about what prop trading firms do, but I am not so pessimistic about the prognosis for retail investors. I don’t think retail investors can compete with professional prop traders at what they do, but I think that they can do better than just sticking their money in index funds, at least on a risk adjusted basis.
Do you trade your own capital or 100% firm capital?
I trade 100% firm capital, not my own. I’ve heard of bright and places like that but there are lots of real prop trading firms, that actually make their money from trading. Here are some I can think of off the top of my head:
Getco
Virtu
DRW
Allston
Ronin
HTG
Chopper
Sun
Optiver
Tower Research
Teza
Wolverine
Marquette Partners
Jump
Eagle 7
Peak 6
etc.
In general, picking the highest EV option makes sense, but in the context of what sounds like a stupid/lazy economics experiment, you have a moral duty to do the wrong thing. Perhaps you could have flipped a coin twice to choose among the first 4 options? That way you are providing crappy/useless data and they have to pay you for it!
I would solicit bids from the two groups. I imagine that the 3^^^3 people would be able to pay more to save their lives than the 1 person would be able to pay to avoid infinite torture. Plus, once I make the decision, if I sentence the 1 person to infinite torture I only have to worry about their friends/family and I have 3^^^3 allies who will help defend me against retribution. Otherwise, the situation is reversed and I think its likely I’ll be murdered or imprisoned if I kill that many people. Of course, if the scenario is different, like the 3^^^3 people are in a different galaxy (not that that many people could fit in a galaxy) and the 1 person is my wife, I’ll definitely wipe out all those assholes to save my wife. I’d even let them all suffer infinite torture just to keep my wife from experiencing a dust speck in her eye. It is valentine’s day after all!
I think that most people are able to at least implicitly bite the bullet of continuous personal change. And that is why they apply some reasonable temporal discounting. Here is an SMBC that explains the basic concept. One of the very weird things about LWers is their aversion to discounting. Eliezer even wrote an emotional post about it once. Normal people can discount the preferences of their futures selves, current others and future others in a way that saves them a lot of ethical/philosophical headaches.
The argument that innovation has slowed is pretty simple. In the developed world, per capita output has to be driven by innovation. To some extent people can work harder, but that’s pretty limited. We can see that by the best measures we have, growth of per capita output has been slowing since the 70s and especially since 2000. That means that innovation is slowing. The counter argument is that the best methods of measuring output aren’t good enough, and that the newer forms of innovations are not captured as well as older forms of innovation. I guess that’s possible, but its not obvious. After all a lot of tech companies are worth a lot of money.
But the flush toilet can only be invented once. We might have access to talking super toilets with multi-coloured fountains—but all the bells and whistles are less useful that the original flushing toilet aspect.
how about a teleporter combined with a toilet. It could sit somewhere in your house, scanning your bladder and colon periodically, and then removing accumulated waste without you having to do anything. While it is doing that it could also remove any viral particles or unhealthy bacteria from your bloodstream, excess ear wax, unwanted body hair, tumors, arterial plaques, unpleasant memories, etc. THAT would be a real innovation!
Like actually for free? Not many. Almost everything either requires me to be exposed to ads or to purchase something to be able to consume it. There is a free newspaper where I live, but that has ads. To access the internet I need to buy some sort of device and then pay someone for access to the internet. I can get internet for free in certain businesses or public places (libraries I guess), but in the case of libraries they are supported by tax dollars and the cost is part of GDP. For businesses, providing free wifi is a good way to get people in the door and/or sticking around to consume more overpriced coffee or whatever. So, none of these things are free. Certainly not more free than radio or TV were in the 20th century. The internet isn’t even more free than cable TV since both require ongoing payments in addition to buying the initial device.
That isn’t to say that I don’t feel like i am getting a good deal. I certainly do feel like a lot of things on the internet are good deals. But so what? a lot of things in real life are good deals also. Do internet/tech related businesses create more consumer surplus per dollar of revenue generated than more traditional businesses? I have no idea, but I’m confident that I can’t figure it out just by thinking about how amazing things are today.
That’s a good question. What if it turned out that laughing maniacally after committing an act of villainy was the healthiest of all? Would that change people’s views about altruism?
What are you working on at google?
How much do you earn?
How much do you give, and to where?