Do y´all think that the top fund managers are good in statistics/math?
For some reason, I personally don´t think that top fund managers like Ackman, Dalio etc. are particularly good in math/statistics. What do y´all think?
Im curious and would like for you to explain why you have this opinion ?
Honestly just a random thought. Ackman for example studied Arts at Harvard and did an MBA there afterward. Probably didn´t have a lot of Math/Statistics, especially in relation to some of the employees who damn near have to be math olympiad winners nowadays, in order to get jobs at the top funds.
your comment reminds me of the famous peter lynch quote that "investing is an art not a science, and people who have been trained to quantify everything are at a big disadvantage ".
The skills you need at the beginning of your career are vastly different than the ones you need to make it at the senior levels.. That's why dweeby analysts who are good at number crunching couldn't necessarily win deals as an MD through interpersonal skills in IB.
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Yes, Ray Dalio, the author of multiple books on economics and founder of one of the largest quantitative & global macro hedge funds, is bad at math. What an insightful take.
didn´t say that he was bad
"I don't think they're particularly good" more or less means bad, at least by the milestone anyone would expect in finance. You're beating around the bush with a question that's poorly thought out from the get go.
You have to understand how much the world has changed since many of these top fund managers started. It also takes a very different kind of thinker to bring quantitative methods to the markets vs being an expert to solve a specific problem. Early on, quantitative methods weren’t really used (outside of people “reading” charts), so to see the opportunity and be able to capitalize on it (with the technology available back in the day) was a big deal.
The problem was just different. Data at the scale we have now didn’t exist, so a lot of time was just spent finding what to use. Trading wasn’t automated. Computers couldn’t do nearly the amount of compute that you can now, etc etc.
So even if you were an expert in advanced math, that wasn’t the difficult problem because there were also fewer managers doing this, so you just needed to be better than others out there. So just having data, having a way to test things, etc was a big advantage.
Even now, there is a question on how much the advanced math helps. It depends on the fund strategy, etc but the debate is still around how much pure math (and theoretical) vs more “quantamental” works best.
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