Hedge Fund Breakfast– Part 1: Bloomberg

Moderator Note (Andy): SenhorFinance is a hedge fund partner based out of Brazil and has worked in basically everything: PE, IB, S&T, management consulting and hedge funds.

IB folks spend some of their evenings in business dinners/drinks, guiltlessly enjoying overpriced food and booze (and depending on local etiquette, drugs and hookers as well). Been there, done that and yeah, it’s lotsafun, because (1) it all runs on expense accounts, (2) it leaves less time for “fuck my life” ruminations and (3) it makes you feel less guilty about skipping gym the morning after.

In HFs, hours are different. For the better, of course. I go home at ~7pm but I can’t party or drink like I used to, because by 8:30am a week’s worth of work must be already done. In this series, I will share my pre-open routine: how I organize myself, what I look for in my screens to generate ideas, what I read. And I call fellow HF/S&T folks to join: how do you prepare for your daily random walk down Wall St.?

1. Bloomberg: A prelude

You already know that, but in case you’ve been in a coma, living on the hills or something worse (corporate development, maybe?), the Mayor’s toy is indeed the shit. I could write hours about its functionalities, about how it raised standards in financial data gathering and analysis, about how it flattened information across agents or about how harder it was to master it 10 years ago, but I leave you only 3 tips.

Tip #1: know it like you know the alphabet, better if possible. If data is garbled, weird or not comparable, learn how to fix it. if defaults don’t suit your style, change them (beginner), tweak them (intermediate), override them (advanced) or re-code them (Inferno). The point here is that every capex hour invested in learning Bloomberg will pay off handsomely in monkey work shelter over the rest of your career.

Tip #2: 2 screens = minimum, 4 = standard, more = douchebagness + distraction (unless you are in algo execution flow monitoring or crazy shit like that). Lobby for 4 screens. If that doesn’t work, bribe compliance, buy the gear and slip security a $50 to smuggle the shit into the office at 3am, I don’t know, whatever it takes. Why 4? See item 2 below.

Tip #3: BBG without BBXL only works for cheap, poorly researched, mass-oriented Hollywood movies. It’s like owning a Ferrari and only being allowed to drive in a 20mph school zone in Louisville, Kentucky.

2. The art of Bloomberg-skimming
Why 4? Because there is a load of data out there, and you need to know it better and faster. Before we embark into the layout itself, remember the golden rule: never switch screens or places. You need your Pavlovian reflex system to direct your sight to the right place whenever you hear trigger phonemes such as “FOMC”, “Draghi”, “Bear Stearns went under”, “Xstrata earnings”, etc. I take that so seriously that I might even still have LEH Equity in my price screen.

Speaking of, screen A is my price screen. Four columns, small font, names, Daily %, MTD, YTD, period. You want to have one of those because as I mentioned in previous posts, there is no experience you can transfer across functions/employers without a decent amount of price memory. That is not the same as always having an explanation for prices or even believing them, but you need to see them all day, everyday. I can probably draw many price paths I never asked BBG to graph. And now that I am past the all-nighter stage and can afford the luxury of sleeping at night, I dream of prices and order books at least twice a week.

Screen B is for news. Typically divided in three, bottom half with top news, linked to whatever I click on in the price screen (I may want quick news about Apple, 82% Fe Iron Ore or the BoJ rate). I split the top half between events (for me, earnings calendar and the like), and economic releases.

[Note about economic releases / announcements: with HFT, no one makes quick money out of those anymore, but you will eventually need to dodge them, so be aware of the pipeline. That usually also means knowing the consensus numbers, and, most importantly, avoiding sleeping at risk when something big is due overseas while you enjoy your daily Valium fix]

Screen C is for a deep dive into whatever it is that your book/firm/desk/fund focuses on. Equities? Have a Launchpad with financials, multiples, peers, price graph & studies, all linked to one single security field. This makes life easier when you need the EBITDA margin of a less known competitor without dropping your focal task. BTMMs for money markets, YA/Indicatives/Spreads for bonds. You got it already.

Screen D is open terminal, the one you actually type shit into. Finding fields for the API? FLDS it. Monitoring option vols? OMON it. Last but not least, this is the screen where you keep your chat screen, with all those annoying brokers desperately trying to dump some fresh shit that IB originated. Or maybe some seasoned shit that they brown-fingered into their banks’ books by accident, and therefore needs to go before it freezes into custody overnight.

That should do it for now. Does this look at all like your desktop at work? More importantly, does this look like a desktop you would enjoy looking at for hours and hours in a row? If it doesn’t, no 2/20 for you

Comments (13)

Oct 11, 2012 - 11:46am

more than 4 being excessive is a good call. Good article, What time do you get into the office in the morning? What are you reading to start your day?

Fear is the greatest motivator. Motivation is what it takes to find profit.
Oct 11, 2012 - 12:00pm

Nice. I've been wondering about what was on each screen.

If your dreams don't scare you, then they are not big enough. "There are two types of people in this world: People who say they pee in the shower, and dirty fucking liars."-Louis C.K.
Oct 11, 2012 - 12:28pm

Ok, obviously more screens is better because you can just ignore the ones you're not using at the moment. So ideal is 9-16 screens, arranged in rows of 3 or 4, with at least 1 devoted entirely to YouTube. The fact of the matter is, there's no way you can see four screens all at once even with superb peripheral vision and lack of glaucoma unless you arrange them in a triangular shape which just looks comical or you sit really far back, which means you need pretty good eyesight for all your small fonts. So then if you are actually moving your head back and forth, the more screens the merrier. QED.

Price memory? Without explanations? Sounds like a chartist. I'm sure we're all in agreement that using Fibbonacci retracements adds way more alpha than Bollinger bands or candlestick patterns.

Oct 11, 2012 - 4:45pm

I remember the pic of Raj Rajartnam sitting at his desk with like 9 screens (4 by 2 with one vertical screen on the side that was 2 rows high).

Good post though. I have a BBG terminal at school and I try to spend a few hours on it every fri and sat when I have nothing to do. I found that BU, has some good tutorials, and you can take a test afterwards for some sort of pseudo certification.

Oct 13, 2012 - 3:02pm

This sounds pretty different from the funds I know. I take it you guys are traders, not fundamental/ value types?

Oct 13, 2012 - 4:53pm

SB, Great stuff.. for a trader on the other side of the screen (re: sell side) you need to be able to see stuff, and see it quickly. Some things that I always have up within my launchpad is ECO, headline news, prices for my product, and chats (not totally necessary, but cant let chats be hidden too much). I have six screens, but BBG can only use three of them..

What's part 2 going to be about? Is there the start of series of some sort? Thanks.

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