I am a judgmental person. I’ll be the first to admit it. I’m not proud of it but it’s true. Sure, over the years, I’ve definitely sought to improve myself and try to generally become more accepting. To become more inclusive and cognizant that folks come from all walks of life; that we all have unique backgrounds which shape and form us in indelible ways. But there is still one pet-peeve that drives me bonkers: Abbreviations.
Here is a completely arbitrary rule that I am super-judgmental about. Acceptable (meaning, what I use, haha): Btw, Idk, IMHO. Unacceptable: “C” == “see” and “U”== “you.” (Eg. “I’ll c u later.”) Oh, and “2” == “too” or “to.” Why? Idk. For whatever reason, in my head I’ve deemed certain abbreviations acceptable and others monstrosities of the English language. What are your arbitrary and entirely subjective rules that you secretly (or not so secretly) judge others by? Post in the comments! I’m genuinely curious! Hope you’re having a wonderful Thursday!
Here are items that caught my attention this week. (Props as usual to the excellent John Scalzi– his Twitter account and blog are absolute gems to follow!)
Before we dive deeply into the math world that is Quantland, into regressions, covariances, and Sharpe Ratios, I want to step back and tell a little parable that is good to always have in one’s mind as background. Today, I want to specifically ask and answer a question that I honestly wondered about for the longest time. Why are Wall Street traders and hedge fund managers paid so extravagantly and obscenely? What exactly do they do?
The banal answer, of course, in the simplest formulation –before the Era of Derivatives and other “Financial Weapons of Mass Destruction” (as Warren Buffett once coined)– is traders sit behind their trading desks and buy and sell equities all day long. Dear Reader, I know this is difficult to fathom, but there once upon a time existed a world before computers and the internet. Back in these olden days of yore –before options trading, calls, puts, strike prices, and whatnot– it really was just “buy low and sell high.” And while the financial world has obviously exponentially exploded in complexity this past half-century, I want to return to that era when things were simpler to tell today’s parable. Strategies, tactics, and tools may have evolved, coming and going with the times– but the overarching mandate of professional traders who trade for a living have not: They are there to generate as much money as humanly possible for whatever institutions that employ them. Let’s examine this Parable of the Three Traders to illustrate how they do that.
