Directional trader paths

Hypothetically speaking, if someone was an outcast in society and possessed no other talents or ability to work a normal corporate job, but had an amazing talent to predict market prices with psychic-accuracy and make directional bets that would permit him to have a double digit Sharpe ratio, would he be able to make a living on Wall Street? How would some savant weirdo with no Ivy credentials and no prestige be able to have a finance career?

In theory, if Wall Street was truly greedy and only cared about profits and bottom line performance, someone like that could indeed make record-breaking income. Of course, the other factors I mentioned I assume would make that difficult.

Would such a person be able to get and hold a bank S&T job @ Goldman or JP Morgan? I would think not, even though the employer could benefit immensely from having some trading freak with X-Men like powers work there. But instead those firms want well-rounded individuals even if their performance would not be as stellar.

An analogy would be an ugly fat guy with no social skills who has a 13 inch penis. Despite his endowment, he would not be able to attract partners, as the ugly facial appearance and lack of social skills would scare them off beforehand. It's sort of the same idea.

 
Elohim:

That analogy doesn't parallel the aforementioned situation as much as you think it does hahahaha, +1 if i could.

LOL yes, but I can not think of anything else that could be used to illustrate that situation. I guess what I tried to point out was that the guy in the example has to learn social skills before he can use his 13 incher. But what skills does the directional trader need to learn before he can use his talents?

 
Martinghoul:

The problem with what you're describing is that you're confounding the imaginary (a magically endowed trader) with the real (a bank such as JP or Goldies).

"A magically endowed trader" is not necessarily "imaginary". There could be some individuals with natural talent originating outside institutional structures.

 
Best Response

I've always been on the deal side of finance where social skills are necessary but I have a good friend who worked at one of the larger HF's that's primarily quant. He was a PM at one of their (rare) qualitative sector focused sub funds but his group sat next to some of the super PhD physics quants and you basically described those people. My friend's a smart guy with a math and science background but he said these guys were basically all Rain Man, could hardly talk to people, one of them rode a unicycle on the floor and the other didn't wear shoes, in Manhattan. Not because they wanted to seem quirky, but he said they were just some of the weirdest people he's ever encountered (and he has advanced degrees in Chemistry so he's been around a lot of lab rats). He said they were nearly unable to interact with normal humans and like I said my friend is a really smart guy but he couldn't even begin to grasp their math and algo's. You're not just going to walk off the street as these guys all had top notch PhD's in physics and maths but yes, it happens.

As to your analogy: Ron Jeremy.

 

As much as I want to positive in my response, I'm looking at your post history and I think you need a reality check. You have some very immature illusions of grandeur as evidenced by your past few topics:

"Say someone's goal was to start a multi-strat hedge fund." "So let's say I have an idea for a show that could be bigger than Game of Thrones." And now "an amazing talent to predict market prices with psychic-accuracy and make directional bets that would permit him to have a double digit Sharpe ratio"

You've been asking for advice for 9 months. What have you done so far? Stop wasting time with these meaningless questions, stop postulating, and just fucking go out there and prove yourself.

 
laststance:

If you had an amazing accuracy at predicting prices, why would you want to get a S&T job? Just manage your own money.

An example of someone doing this is the Japanese trader 'CIS'. http://www.bloomberg.com/news/articles/2014-09-25/...

This. If this person did exist, the prospect of needing to raise money or get a job is self defeating since if you are super-rainman-guy you'd be printing money for yourself (metaphor).

Like the guy in the movie Limitless. If that was real, getting a job would be literally the worst possible thing you could do.

 

The fact that you're blending a supposed top talent with an S&T job proves you don't have the slightest clue how the business works in the first place. Send me an official generated track record of your supposed stellar record and I'll send it out to my audit and tax group immediately, if it checks out I'll send you a job offer at an energy HF in Houston at the end of the month.

... Here's why you won't do that: you aren't some trading god, go away.

"Say someone's goal was to start a multi-strat hedge fund." "So let's say I have an idea for a show that could be bigger than Game of Thrones." And now "an amazing talent to predict market prices with psychic-accuracy and make directional bets that would permit him to have a double digit Sharpe ratio"

Let's say you just stop posting, how about that?

 
EnergyHOU:

The fact that you're blending a supposed top talent with an S&T job proves you don't have the slightest clue how the business works in the first place. Send me an official generated track record of your supposed stellar record and I'll send it out to my audit and tax group immediately, if it checks out I'll send you a job offer at an energy HF in Houston at the end of the month.

... Here's why you won't do that: you aren't some trading god, go away.

"Say someone's goal was to start a multi-strat hedge fund."
"So let's say I have an idea for a show that could be bigger than Game of Thrones."
And now "an amazing talent to predict market prices with psychic-accuracy and make directional bets that would permit him to have a double digit Sharpe ratio"

Let's say you just stop posting, how about that?

I never even alluded to the fact I thought this was me. I'm just trying to understand how things work in this world, and trying to FALSIFY (Karl Popper style) ideas that run through my head. Do you have Asperger's Syndrome? Don't take my posts literally. They are thought experiments about ideas that I'd like to falsify so I don't even try to waste time thinking about these things.

Also, whoever put Ewan McGregor picture from Rogue Trader is hilarious.

 

A few people definitely need to chill in this thread. Sure it's a dumbass question that has almost no application to a real world scenario, but it's nice to have an imagination sometimes. But to answer OP's question, I think getting a job at a large bank at a prodigious trader is a dumb move. Why would you want to work at a bank for hundreds of thousands when you could be working for yourself and make millions? Like someone mentioned, this is completely like the movie Limitless

 

So the individual in the situation that you describe, namely a 'savant trader' with the ability to accurately foresee future market conditions, would not only be wealthy, but he/she would be the wealthiest person that has ever lived or ever will live.

That individual, in effect, would become the financial system. He/she would make it impossible for governments to borrow any money in capital markets (the risk-adjusted return on government securities would pale in comparison to those offered by the 'savant'). Sharpe ratio's would cease to exist; there would be no capital allocation line. There would only be a single point on the y-axis representing that individual's return (which is risk free).

He would start out with a small loan and invest. He would reinvest 100% or close to 100% of his earnings into his portfolio, growing the asset base and its return. His returns would draw additional investment from which he could draw additional leverage, further magnifying his returns. This process would continue, growing his asset base and returns exponentially.

That individual's wealth, without diminishing marginal returns, would grow to infinity. He would effectively enslave all of humanity.

“Elections are a futures market for stolen property”
 
Esuric:

So the individual in the situation that you describe, namely a 'savant trader' with the ability to accurately foresee future market conditions, would not only be wealthy, but he/she would be the wealthiest person that has ever lived or ever will live.

That individual, in effect, would become the financial system. He/she would make it impossible for governments to borrow any money in capital markets (the risk-adjusted return on government securities would pale in comparison to those offered by the 'savant'). Sharpe ratio's would cease to exist; there would be no capital allocation line. There would only be a single point on the y-axis representing that individual's return (which is risk free).

He would start out with a small loan and invest. He would reinvest 100% or close to 100% of his earnings into his portfolio, growing the asset base and its return. His returns would draw additional investment from which he could draw additional leverage, further magnifying his returns. This process would continue, growing his asset base and returns exponentially.

That individual's wealth, without diminishing marginal returns, would grow to infinity. He would effectively enslave all of humanity.

LOL. What I meant in the original post at the top by "savant trader" was the ability to generate 30+ % returns per year with less than 1.5% drawdown at any given time, without having any other marketable skill. And even that was hypothetical. Funny how so many took this thread waaaaaaaaaaaay out of proportion.

 

interesting concept, I would like to think the latter tho. Does any one know where to get leads ? one of the guys in my old office told me about LeadsAgain dotcom, hopefully I can start off on the right track to starting my own branch

 

To be honest, the main reason such a person would have a tough time getting hired is because his bosses/colleague might find him insufferable. It's not like traders in S&T or hedge funds need to be super personable. But they're typically part of a team, and when you're in a high stress environment 60 hours of the week in the office (and always 'on' when you're out), you need a good team if you want to cope with it all.

This is probably less the case on the buyside vs. S&T, but that factor in to just about any interviewer's thought process.

 

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