Tag: fighters

How do i describe my job?

One of the “problems” with my job, if I can describe this as one, is that it’s tough to explain my job to a layman. There are multiple levels of disconnects here, and multiple “pitfalls”, if I can call them that. So when someone asks me about my work, it gets tough indeed to describe to any degree of accuracy while at the same time being concise, and at the same time talking in Kannada.

I am a quant at a hedge fund.

My work involves coming up with trading strategies, and then developing them to a level where I can have the ultimate fighter – a computer – to trade using these strategies. Then, I will need to figure out how the computer is going to implement these strategies and this part involves some heavy engineering work. And finally I code. Ok now I haven’t been accurately able to describe in one paragraph, writing in English, about my job. How do you expect me to describe it to the layman speaking in Kannada?

Coding is a part of my job, but I’m not a coder.

I deal with financial products – equities and equity derivatives. But I’m strictly not a finance guy – as far as I’m concerned, each security is just a time series. A time series on which I can trade and make money. In fact, apart from my short stint selling interest rates swaps in London, I haven’t really done any finance. My entire view of the markets is based on my idea that a security is just a tradeable time series. I think I should do a separate post on that. Anyways, I’m not strictly a finance guy also.

One of my degrees is an MBA. A PGDM to be precise, from IIMB. But I’m not a manager also. I don’t manage people apart from myself.  I’m not sure I’ll find that interesting either – I sometimes think managing is too fighter a job for me.

And so on.

And then, I work for a hedge fund. Most people don’e have a clue what a hedge fund is. I sometimes make an approximation and tell them I work for a mutual fund. And immediately I get bombarded with questions like my opinion on whether the markets will go up or down, and about how long the recession is going to last. And then there are those who start telling their sob stories about their investments in the markets when the Sensex was at 20,000 and about how markets can’t be trusted any more.

Another level of contradiction is that I’m based in Gurgaon. All finance companies are supposed to be in Bombay, right? Surely, given that I’m in Gurgaon, I must be doing some back office kind of work?

Last night my uncle was filling up some arranged marriage exchange registration form for me. And he asked me to describe my job in a short phrase. I immediately came up with “trader” and that got quickly shot down since that would give the image of a lala sitting behind huge weighing scales. Next I tried “financial trader” and “quantitative trader”. No go.

Then I wanted the simple “quant”. My highly stud uncle himself had trouble exactly figuring that out, so fat chance anyone would appreciate that. So out again. I relaxed constraints a bit and said “hedge fund professional”. But most people wouldn’t understand “hedge fund”. “mutual fund” was no go for a written form. “quantitative analyst” was considered too country by my uncle. He then asked me my designation. “Associate” doesn’t mean anything, he said and shot that down too.

Sometimes I wonder if I’ve unnecessarily complicated life for myself by choosing the path that I’ve chosen. If I were working for some software company I could’ve just written “software” over there and all would’ve been fine. The whole world would’ve understood, or at least claimed to have understood. Or even better, if I were living abroad, I wouldn’t have even been required to say that much. I’d’ve been just qualified as a “foreign huduga”, with most people not even caring for which city I was in.

For the record, my listing application records my profession as “financial services professional”, as country as it sounds. This was the only middle ground where my uncle and I didn’t disagree. And in it went. It increasingly looks like I’ll have to put fundaes to Cesares about why the stock markets have gone down in the last one year in order for them to allow their daughters to marry me. I have half a mind to start describing Ito’s lemma the next time someone asks me where the markets are headed. I’ll probably start off describing to them a random walk. And say that it’s a drunkard’s walk. And perhaps use that to change the topic. I think I might need to start practicing this. In Kannada.

I’m a quant at a hedge fund.

Fighter Batsmen and Stud Bowlers

Insight of the day: Batting is inherently fighter and bowling is inherently stud. Of course there are severral stud batsmen (eg. Sehwag) and fighter bowlers (eg. Giles) but if you look at it broadly – a batsman needs to get it right every ball, while a bowler needs only one ball to succeed.

The fundamental idea is that bowling success can be more lumpy than batting success – for example the maximum that a batsman can do if he has one great over is to score 36 runs – whcih in the context of the average game won’t amount to much. However, if a bowler has one great over and picks up six wickets, the impact is tremendous.

The bowler can afford to be much more inconsistent than the batsman. He might get a few balls wrong, but he can suddenly make an impact on the game. For a batsman to have a significant impact, however, he should be able to carry it on for a significant amount of time. An “impulse”  (a large force acting for a small time period) will do the batting team no good, while it can be a tremendous boost for the bowling team. On the other hand, steady unimaginative play by the batsman is good enough, while a bowler needs to necessarily show patches of spectacularity to have an impact.

Hence, batting is fighter and bowling is stud.

However, what the advent of one day cricket has done is to invert this. By limiting the number of overs, and creating conditions where a team need not be bowled out, it has turned things upside down. Of course, a stud performance by a bowler (say a hat-trick) can have a significant impact on the game, but inconsistent and wayward bowling is likely to cost the bowling team significantly more than it does in Test cricket.

Similarly, with the game getting shorter, an impulse by the batsman (say a quick 40 by Sehwag) has a much larger impact on the game than it does in Test cricket. And on the other hand, dour batting  – which is so useful in Tests – may actually be a liability in ODIs. Similarly the mantra for bowlers has become containment, and thus fighterness in bowlers has a greater impact – and so people now do respect bowlers who can bowl long spells without taking wickets, but just containing.

Remember that even now, to succeed in Test cricket, you need to have the correct characteristic – Sehwag’s batting might appear stud and risky, but he has the ability to play really long innings which is why he is a really good Test batsman. If he didn’t have the “longevity gene”, he would’ve still remained a one-day wonder. Yes – now teams do pick a fourth bowler to do the “holding role” – keeping one end tight while others attack. Still, the holding guy needs to have some ability to pick up wickets by himself.

Preliminary reading on studs and fighters theory:

Studs and Fighters

Extending the studs and fighters theory

Process

A couple of days back, I was debugging some code. And yes, for those of you who didn’t know, coding is a part of my job. I used to have this theory that whatever job you take, there is some part of it that is going to be boring. Or to put it in the immortal words of a brilliant co-intern at JP Morgan “chootiya kaam”. And in my job, the chootiya part of the kaam is coding. That doesn’t mean that I’m not enjoying it, though. In fact, for the first time in nine years (note that this takes me to a time before I’d started my BTech in Computer Science) I’m enjoying coding.

Coming back, I was debugging my code yesterday. It was one of those impossible bugs. One of those cases where you had no clue why things were going wrong. So I started off by looking at the log files. All clean, and no bugs located. While I was going through them, I got this idea that the strategy sheet might offer some clue as to why things aren’t doing well. Half the problem got diagnosed when I was looking at the strategy sheet. Some problem with cash management.

And when I thought looking at the trades might help. The bug was presently discovered. And then it hit me – that I’d unwittingly followed what seems like a “process”. Everything that I did had been guided by insight and instinct. Yet, the steps that I followed – 1. look at the logs; 2. look at the strategy sheet ; 3. look at the trades – seemed so much a preset process. It seemed to be like one of those things that I’d just ended up reading in some manual and following.

I realize that most “standard processes” that are followed by  various people in various places are stuff that were initially not meant to be processes. They were just an imprint of somone’s train of insights. It was as if someone had a series of insights that led to a solution to whta might have been a difficult problem. And then, he realized that this kind of a process could be followed to deal with all such similar problems. And so he wrote down the process in a book and taught a set of people to implement them. The field thus got “fighterized“.

The argument I’m trying to make here is that a large number of so-called “standard processes” are just an imprint of someone’s insight. They just happened to get into place because the inventor noticed this pattern in a bunch of things that he was doing. They need not be the best way of doing what is supposed to be done. Maybe there isn’t even a single best way of doing it that might work every time.

People who are likely to have worked on processes later in their life cycle are likely to have been people who are process-oriented themselves, and given how these kind of people work, it would have been likely that they would have resisted changes that could make the process worse in the short term. They are more likely to have been incremental in their approach. With a succession of such people working on improving the process, the process of refining the process would’ve ended up taking a hill-climbing algorithm and is likely to have ended up in a local maximum.

Once again, the large changes to the process would’ve happened when someone who was willing to take a large step backward worked on them, and it is again likely that such a person would be driven more by insight rather than by process.

My hypothesis is that most processes are likely to have been largely defined by people who are themselves not very process-oriented, and who thus will expect a certain level of insight and discretion on the part of the person implementing the process. And one needs to keep this in mind while following processes. That it would be good if one were to take a critical view of every process being used, and not be afraid to take a backward step or two in process development in order to achieve large-scale improvements.

Meeting Sickness

Ok here is another reason I can think of as to why I didn’t do well in my consulting career. This is based on something I’ve been observing at office over the last week or two. I suffer from what I call as “meeting sickness”. The inability to work immediately after a meeting.

Rough empirical analysis tells me that for every meeting of N minutes that I sit through, I need another N minuts of downtime following it before I can get back to work. I don’t know why this happens to me. I don’t know if I’m having to spend too much willpower inside the meeting. Or if it is just that at meetings i get into high-intensity mode and that drains me out.

Whatever it is, in a typical consulting environment, you are expected to attend lots of meetings. If you work for a company that believes in the philosophy that all work is to be done at the client’s location (such as AT Kearney) then you have meetings throughout the day. it is only in between meetings that you get time to work, and usually the way the projects have been sold means that you can’t afford any downtime.

So that explains it. The other big reasons I’ve come up with for my failure in consulting environment are it requires a high degree of willpower which I dont’ have; and that it is an essentially fighter job. Maybe these are inter-related. Need to think on these lines and come up with something.

And if you didn’t like this post, my apologies. I had an extra-long meeting at work this evening from 4 to 7 (and had sat through three other meetings since morning). I fled immediately after, but I’m yet to recover.

Extending the studs and fighters theory

In a seminal post written over a year back, I had classified people into two, based on their working styles. I had called them “studs” and “fighters”. Studs, I had argued were people who had the knack of finding the easy way out. Who liked to work around corners, and find short cuts. And who would try to do things in as efficient a manner as possible.

Fighters, on the other hand, were supposed to be extremely meticulous, and process-oriented, and extremely hardworking. They would make up for their lack of natural talent by way of sheer hard work, and would be extremely determined in order to achieve their goals.

Today, thanks to a shared item on Google Reader by JP, I came across this article in The New Yorker. It talks about how humans get insights. The article talks about the process, or the lack of it, that leads to people getting insights. A large part of the article is a bit technical, and talks about a lot of biology. But if you can navigate through that, it offers a lot of insights on what goes into insights, and what might be needed in order to think in this sort of manner.

One major idea that is presented in this article is that insights are usually developed by the right half of the brain (for right-handed people), while most process-oriented stuff and calculation takes place in the left half. The article argues that in order to leave ourselves open to more insight, we need to take care not to focus too much of the problem. It also explains that you are likely to get your insights when you are least expecting them, such as when you are playing table tennis.

Ok, so going forward on these two lines of thought, I argue that “studs” and “fighters” can be extended to learning styles rather than as just working styles. It is the way in which the two categories of people understand things. Studs, I believe, are the people who tend to get most of their understanding by way of insights. People who are unable to put a finger on the process by which they learn a particular thing. Because of this, their thought is so unstructured that it is difficult for them to precisely and correctly follow processes.

Fighters, on the other hand, get their understanding incrementally, by following a process. They build up their understanding bit by bit. Slowly but surely. They are inherently left-brained people, and because their learning style is so processed and orderly, they thrive in orderly environments. Where all you need to do is to come together and go through a process. They are willing to work hard. They don’t mind if what they are doing is not insightful (partly because they experience insights so rarely). And thus lead low-volatility lives.

One other important insight from this article is that you are not consigned to a career in liberal arts or related fields if you are a right-brained person, as a number of people would like to convince you. Popular belief is that people who are good at math are inherently left-brained, and those good at languages are inherently right-brained. And that the paths for these people are disjoint. And they should stick to what they are good at.

However, what you might want to infer from this article is that all that it means by being right-brained is that you survive on insights. And that you are more likely to be a stud than being a fighter. The old school used to say that engineering is for the left-brained because they saw engineering as being process-oriented. And they saw the liberal arts as being insight-oriented. However, there are enough instances to show that the complementary skill is also important in both kinds of fields. You need studs in engineering, for if everyone would just follow the processes, there wouldn’t be anyone to think out of the box and come up with new stuff. You do need fighters in the arts, for on many occasions it’s a sheer execution game.

In any case, I would advise you to go read the article. It’s longish, but offers important insights. And if you think you are an insight-driven person, as I think I am, it might help to show this article to your bosses, and explain to them that making you focus may not exactly be the best thing to do in the interest of the firm.