Interview question @ Wall Street hedge fund
Interview question @ Wall Street hedge fund:
You have the chance to spend $200k for an investment.
What is according to you the best investment.
One guy said it was to do an MBA at Stanford, Harvard and UPenn (assuming yearly tution costs = $100k and the program is 2year long).
Consider this answer as the reference please give me better investment opportunities along a 4 year horizon.
Sustain your answer like if you were a top tier data scientist with graphs and key figures.
depends on the individual....for myself...the best investment would be to take that $$ and daytrade futures contracts...but this is essentially what i do right now...and i feel i have an edge in doing so. Whats your edge?
What's a day in your life look like for a typical day trader?
every trader is unique (when i say trader...i'm a one man shop..no boss, no PM, no analyst..its just me and the screens..i'm part of a group, but we are all independent)...but my typical day goes something like this
10pm set alarm levels in my software to wake me up where i would be interested in putting on a trade overnight (various structures) ...also set levels in my spreader algo to execute if certain other levels get breached (sometimes the curve makes odd kinky movement overnight because of lower than normal liquidity...that tend to get ironed back out during normal hours)...and then goto sleep
2-4am usually wake up and check the markets...usually go right back to sleep if nothing significant (my software will sound an alarm that wakes me up if something has moved to levels i had set the night before...so this is just a habit)
7am wake up and check markets. If nothing significant happening, take a shower and eat breakfast. Sometimes the markets are moving early and i thus don't get to take a shower...in which case i just start reading the overnight news feeds to see what happened while i was sleeping, and drink a protein shake. I have a full trading desk setup at home with a VPN to my work network, so i rarely need to actually go into the office.
7/8am-5pm (futures market closes at 5pm...opens back up at 6pm...so open 23 hours a day until the weekend) i watch the screens, news feeds, read research and commentary from ibank sales people, look at charts, pretty much constantly doing all that, all day long...all the while trying to manually scalp 5yr notes, 10yr notes, 30yr bonds, ZB bond futures (seconds to minutes) pretty much all day long...while also looking for longer term moves (hours to days). Scalping is usually done outright...sometimes turns into a curve play when caught on the wrong side...longer term plays are usually curve and fly/barbell type trades...and off-the-run RV of course.
I was taught to try to make money any way you can (outright, curve, fly, RV)...and these are the types of things that i was taught (i've evolved from what i was taught...but that was my springboard).
Mostly, my days go by ridiculously fast..i sit down...gear in...and at 5pm look up and can't believe how fast the day zipped by.
-'I would put the $200k in your fund sir. You are averaging yearly returns of 7% over the economic cycle.'
The 'best' investment would depend on what goal(s) you are trying to achieve with that investment over a particular timeframe. So it 'depends'..
The smartest starting point would be to deconstruct "best" and "investment" and then go from there
buy fannie mae and freddie mac common & preferred shares.
stick it in the s&p 500 index and forget about it aka buffet strategy
OP has only 11 bananas asks for a very complete answer with data, analytics etc.. Why don't you do your own fucking job and think about it yourself for your interviews. The MBA thing is moronic to even mention on a trading desk.
on a different note...my best investment has actually been in a startup premium alcohol company...was sold for about 50x the initial valuation. My only regret was not investing more.
Then you remember an investment where you lost 100% of your money and you don't regret having invested more!
uhm...no...i made 50x (thats 50 times my investment) my money...thats a 5000% return. It was so long ago that i forgot. However, i wouldn't know how to find another similar investment opportunity today, as the premium alcohol space has become very crowded.
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