This page has been archived and commenting is disabled.
Meet The Future Of Trading: A 25-Year-Old... Math PhD
Forget the middle-aged belt-and braces stockbroker who 'knows' a good stock. Ignore the 5-star tech analysts who never saw a startup he didn't like (with your money). Meet 25-year-old math PhD Sam Barnett, CEO of SBB Research - a quant hedge fund - who, instead of wild extrapolations and Keynesian hockey-sticks, trades the market by "using data to mine information before it is encoded into the markets."
While several of the CNBC team flounders to show why their commissions are worth it, and why a 25-year-old could not possibly 'know' anything, we for once agree with their premise - this IS the future of trading - 25-year-old math PhDs mining data faster than a fat finger can press buy.
»
- 35831 reads
- Printer-friendly version
- Send to friend
- advertisements -
Was he short oil? Booyah Jim!
Wanted - Genius Math PhD. Must be amoral and unencumbered by a conscience. Imperative applicant is willing to share his secrets and have an affinity for hookers and blow. Apply in person at Goldman Sachs.
He looks like a cyborg, as I saw them in movies.
just do what all these other banks do, bet on inside information. DUH. Just know ahead of time what the fed minutes are going to say, any QE restarting, and rather or not interest rates are moving this time, and there you have it. Also, billions of shareholder dollars to pay your fines and lawyer fees dont hurt either....
There is a classic head and no shoulders pattern at 1:23 in that video.
Machine self learning is coming in so many ways it will make your head spin. Deny at your own risk.
No doubt digitally advanced but analog challenged. That ain't trading son. That's cheatin'. Like counting cards in a casino. Oh, wait.....
Guy is full of crap, managing $150 mil in a fund. Good luck cashing out that.
2 and 20 on $150 mil is still more than I make and I'll take a wild guess its probably more than you make too...
21st Century Humanoid Robotrader, PhD, Math. Summa Cum Diode.
Last time this happened, the kid admitted to not having a net worth of $73MM....not so sure I would trust this kid with my fund....I think I will go with Algo #8 for 50,000 quatloos
this dude is also a pro tennis player...no S#!+
Can´t be true, he´s not Asian. He´s merikan and we all know they can´t do maff.
Must also be ignorant of the fact that he will be replaced by the next whiz-kid who is more geniuser.
Since nobody on Wall Street even knows "math," it's easy to do what this guy does.
Bamboozle.
He is not an employee. He´s an entrepreneur in an age where everyone is a victim. Sure his daddy had money but smart people usually do.
Here´s a link from forbes for those interested,
http://www.forbes.com/special-report/2012/0801_college-entrepreneurs-bar...
Just another wannabe "Grand Wizard" behind the green curtain...
So..., and so, duh, so....
Bull shit artist can't even tell you what he is trying to do except that it has something to do with "quant", whatever he thinks that is.
Haven't we seen enough of this free floating hype and arm waving?
"We're playing this game...." Need any more? First hard whipsaw and he's tits up.
Some Flaws in NeoCon and NeoClassical Economic theory:
·
P< P+I Banker Credit system doesn’t create extra money to account for the I (interest) as usury. System must cancel debts in bankruptcy to make up for the disparity. But, even that is now an impossibility as SPV’s and other creative devices are invented by Quants to suck the money supply toward them as rents taken on the productive.
·
It ignores the wealth illusion, as if Capital Gains are wealth equal to that created by labor or creativity.
·
Ignores perpetual growth as required by usury money system
·
Ignores perpetually increasing scale of government and business.
·
Ignores increasing velocity of life as we have to run to make money, to then pay the upper loop where P+I lives.
Maybe the mathematician doesn’t understand simple math? It is a slavery system, and anybody with a true logical mathematical mind should be able to see past the curtain.
This video can help Sam Barnett’s confusion. Take a rest from you rent taking and watch the video Sam
https://www.youtube.com/watch?v=96c2wXcNA7A
buy before fed... where can i get my phd?
hes getting his PhD in BTFD
More seriously, I am a scientist. Statistics is a vital part to science, but often times statisticians are completely oblivious that their fancy equations and algorithms are completely irrelevant to the underlying biology they are trying to explain. So you end up getting bullshit research published in Nature, because hey, its 'statistically significant' (just not biologically significant). I guess I dont want to be a prick here, Ill wish the kid good luck, but Im not convinced a mathematician knows any better than an Etrade baby
Black Swans FTW!
"I'm not convinced a mathematician knows any better than an Etrade baby........"
"Nuff Said".......
i work as a data analyst and do predictive modeling....i dont use any predictive modeling on market data because for predictive models to work, the future has to mimick the past and its rare that markets will act like they used too.
to create these 'signals', ie; mine data irrelevent to markets is expensive (brains are expensive) and ..yeah.
btw, no STEM degree here ;)
~DipshitmiddleclassWhiteKid
Surely if he could do the math he would simply stay away from anything financial.
Yeah because that's worked out well. YTD: S&P500 +13%, Bonds +5%
You are looking at the wrong math.
He is an idiot if hes investing in all bonds and not just the long end
+100
Perhaps another Long Term Capital Management company in the works?
Hope he remembers the old-timers sayin' GIGO: Garbage In --> Garbage Out
Yes. Don't want to pour cold water on math geek. Markets are not tangible products that win with killer apps, etc. Judgments go into Algos not the other way around. Did he see the collapse of oil prices recently ?
sorry to burst your 'math geeks don't know shit' bubble, but markets don't have to be tangible products to build object oriented models of how they behave. you can adjust submodel priority depending on where the money is flowing; they in fact tell you where the money is going not only in terms of the source of certain investments but also the rate at which funds are flowing in a particular direction. The gist of this kind of modeling is this: "my information is better than yours, which reduces the risk of me making a bad decision viz-a-viz your decision-making." this is why he specifically says his bets are 'longer term' cuz you can't just cut the flow of funds in a particular direction without pissing everyone off and losing all credibility.
Behavioral science, meet global capital flows.
Yes. Don't want to pour cold water on math geek. Markets are not tangible products that win with killer apps, etc. Judgments go into Algos not the other way around. Did he see the collapse of oil prices recently ?
"GIGO: Garbage In --> Garbage Out"
.
Math people are crazy and awesome. I wish him the best of luck.
trading????you mean front running trends?? high speed...algos...its all good but you dont need a ph.d to know momos,shorts,resistance and support and rumour control.lol
Evil wrapped in celebrity status. Yawn, moving on.........
Liquidate all financial assets. Raise physical cash and buy physical gold. Let those responsible onboard all the return free risk.
Check out http://jimrickards.blogspot.com/
and read his Dec.19 post re "In the year 2024"
Would not be surprised if something along these lines develops. Even if it does, you just know that some gold die-hards will hang on to it even then, while hoping that this balance will change in their lifetime, or their kids' lifetime. I would try to be among those who sold near the peak, but kept a few just for fun and sentimental value.
What is this CNBC thing with a bunch of high school dropouts asking questions? Is this actually a TV station?
optimistic about the tech sector. lulz
Nobody rings a bell at the top...
except when they do. Tee Hee.
problem for us is people like him have learned from history of market sell-off moves, and they will exploit that just like they exploit the upside -
NoVa
I wonder how his model(s) account for the bank's 'influences'.
Invest locally, do business in cash and don't report it, stack phyzz and lead, starve the god damn fucking beast.
We data-mined some folks.
This place has changed for good
Your economic theory said it would
It's hard for us to understand
We can't give up our jobs the way we should
Our blood has stained the coal
We tunneled deep inside the nation's soul
We matter more than pounds and pence
Your economic theory makes no sense
One day in a nuclear age
They may understand our rage
They build machines that they can't control
And bury the waste in a great big hole
Power was to become cheap and clean
Grimy faces were never seen
Deadly for twelve thousand years is carbon fourteen
We work the black seam together
We work the black seam together
The seam lies underground
Three million years of pressure packed it down
We walk through ancient forest lands
And light a thousand cities with our hands
Your dark satanic mills
Have made redundant all our mining skills
You can't exchange a six inch band
For all the poisoned streams in Cumberland
Your economic theory makes no sense
One day in a nuclear age
They may understand our rage
They build machines that they can't control
And bury the waste in a great big hole
Power was to become cheap and clean
Grimy faces were never seen
Deadly for twelve thousand years is carbon fourteen
We work the black seam together
We work the black seam together
Should the children weep
The turning world will sing their souls to sleep
When you have sunk without a trace
The universe will suck me into place
One day in a nuclear age
They may understand our rage
They build machines that they can't control
And bury the waste in a great big hole
Power was to become cheap and clean
Grimy faces were never seen
But deadly for twelve thousand years is carbon fourteen
We work the black seam together
We work the black seam together
- 1 for the copy paste.
Go read "Canticle for Liebowitz" for a classic story on human condition in the nuclear age & relationship with God.
NoVa
Sting baby, Sting... Dream of the blue turtles, nice
25 1/2
i have underwear older than him
The way of the future. My son is working on his Masters in quantitative analysis. He analyzes meta data and stuff.
background isotope radiation
its the future !!!
Then it is hardly a 'market' then... a place to buy and sell shares based on intrinsict value, price discovery.
Use of it through data mining to game and undermine the market's purpose is outright corruption.
How on earth is it permitted, and not a criminal offence?
you're an idiot
you could say the same thing about hedge fund analyst who go through a companies finanicals and find instrinsic value
this kid isnt gaming the markets, he isnt HFT.
WB - 9600 baud?
Accoustic coupled Bell 103 maxed out around 300...
Mike Krieger ?
Just last week the future of trading was a 17 year old with a smart phone, churning penny stocks for $17M.
I am going to start a hedge fund company.
I am going to get ONLY math and physics PHD's to work for me!
We are going to crunch numbers and make the best investing decisions EVEA!!
I think I am going to call the company, "Long Term Capital Management"
Everything old is new again!
my physics ph.d. isn't doing me any good....i've been long oil, long silver, and short the S&P500 for over a year.
(perhaps i'm only supposed to be trading with other people's money...?)
Me too. I heard wages are now really low for them in China. Baffle with bullshit. That is why Wall Street and Hollywood are in the USA.
Sure, trying to use math to predict the future. Nobody's ever tried that before.
Um. According to the premise, this is exactly what HFT does already.
Ok this guy can't know anything about thousands of stocks themselves, so he's planning to get that information through the way markets react to information. i.e. from the way people react to the info. Well... That only works while there ARE people involved who know how a piece of information will affect different parts of the economy or an specific stock. As the real people get pushed out all that remains are algos reacting to one-another in feedback loops.
We don't value DCF; we value bandwidth.
Tappin' out. Too rich for me.
We'll see how the math whizzes do if the Federal Funds rate ever goes above 1%
He's talking about fundamentals in the market....oi vey.
Some folks got conned.
Some folks did some meth.
This guy reminds me of an employee of Insurance Panda... Lol
Black Swans are not calculated into these Algo's. One bomb, one day, somewhere, will implode this type of trading scheme/strategy.
always has. +1
Big data mining is done 'people to people' by a machine, 'machine to machine', or 'people to machine'. Machinist sounds like a great job title to put on a business card
Let's check back in a year, see where the S&P is, and see if all the people mocking his calls on ZH are right with their "gut checks" seeing the top vs his math seeing trend continuation.
I think you might be surprised who ends up right.
Tend to agree, but, at the end of the day, his lens is still the past. Moreover, has he built in the effects (objective as he wants to call them) of the Central Bank policies in general, Fed in particluar? Does he take into account the effect new money has on asset prices (Cantillon) and that those values are at an increasing risk as Central Bank policies change? Moreover, is he confident that the data he is getting is accurate (not manipulated).
The model, while admirable is not new - just more parameters and quantifiable variables.
A stock goes up until it doesn't, and no amount of trend analysis on consumer behaviour changes will help him decipher - in the face of what is perceived to be totally indisputable facts/evidence - when or why this occurs.
For sure. Would love to check in with him a year from now, but, I bet that his model while robust and good at spotting trends, will inevitably suck at warning him of a 300 pt drop in the S & P, and it is here where he will be reminded that there is no system - ever - that will be immune to that.
Very insightful post. That is almost what I would have posted on his model. I think we may have done similar work in predictive algos at uni and work.
The maths becomes much more interesting when you start using neural nets to train, but essentially, the datasets used to train the net is, as you say, based on the past - hence the characteristics of being very good at spotting trends that happened before, but terrible at anything unusual or as is the case these days, manipulated on the whims/politics of the Fed.
"........A stock goes up until it doesn't.........
".....it is here where he will be reminded that there is no system - ever - that will be immune to that......."
Indeed.....
The "Answer" in Markets is NOT Mathematical......
The "Black Box" in ALL forms and variations will ALWAYS Fail because they cannot PERCEIVE......
AND Most Importantly, because HUMAN NATURE is a VARIABLE INPUT; thus rendering any MATHEMATICAL FORMULA a FALLACY on its face......
Basic LOGIC is always ignored on this Subject.....
Since algos are running Wall Street, those talking heads on CNBS must also be run by algos.
Anybody ever notice if the blonde bitch has philips screws for nipples?
This guy is way overqualified
What more do you need to know beyond BTFD?
"I make sure that I produce some quantifiable bullshit."
*Cue applause
"While several of the CNBC team flounders . . "
That's the beginning of a sentence with infinite possible ends almost every one of them plausible.
I wonder if many folks know just how stupid some PhD's can be. There are a couple in my family. Better shut up now or I'll be getting Texas Turds for Xmas.
I know especially "quants". You better do not leave them out on the streets after dark.
Just look at all the Harvard, Yale, Princeton, Wharton MBA's (including Bush) who ran the financial sector, and many big businesses, into bankruptcy.
Just sign up at Grand Canyon, Phoenix and other schools for your advanced degree.
Arnold Schwarzenneger received his master's degree in international marketing for fitness from some school in Indiana via correspondence, and Arny is rich and a former Governor, just like Jesse Ventura.
Where do I send the check?
I'm so in.
Another HF Algo Play?
I keep telling folks in healthcare, pay attention as this is what modeling health insurance policies too, as they have hired armies of of them. Healthcare analytics is just a lot of guys like this and it's scary as we're not data rumbling through markets, but they are trying to use some of the same models.
http://ducknetweb.blogspot.com/2014/10/data-scientistsquants-in-health.html
I think it's a little over rated as they same type of constituted models are not saving money on health care as they were trumped to do either. CMS is stuck right now with a lot of their United Healthcare models they have used. As Paul Wilmott says "it will never be 100 bottles of beer".. and explains that 99% of financial models don't include the real world.
http://ducknetweb.blogspot.com/2014/04/it-will-never-be-100-bottles-of-beer.html
You reach a point to where you have to stop and ask if particular algorithms have crossed the line from being a utility to being a menace...Christopher Steiner did a talk on that and it's a very good question. So how long he lasts and how much accuracy he gains, well it will be interesting to see, but frankly luck still plays a very big part in all of this, along with insider trading and other little elements like that.
http://ducknetweb.blogspot.com/2014/05/this-call-may-be-recorded-for-quality.html
I'll certainly give it to him on being optimistic about the technology sector. Lots & lots of 'Big Data' to be gleaned, mined, sorted and filed. 'Dossiers' in plain language, on everyone and everything, up one side & down the other - to keep you 'safe', of course.
First of all this is not trading but"investing" When he explained his long term trends he is looking at and his explanation of next year bull market I know this is all crap. Anyone can make money after 2010 markets went straight up until now, but do not use your brain. He is a confused boy
Forbes was pushing this douche a few years ago
He's another puppet being offered up as the next big thing pushing the same shit different shape mold of the corrupt hierarchy. They like to regularly fleece the sheep by putting out a fresh new "chosen" face. Make him young, since the pedos in charge like 'em young, and build him up into a massive new IPO where they'll screw everyone out of billions and then use the algorithms to track and monitor you more efficiently to take your money faster and enslave you further. All on your dime
Think back to a gorky red headed phoenician replacing myspace with the gazillion dollar same shit in a different shape social network but now coming to you direct from bankster central
Not sure why this is news. He's not the first, and he will not be the last.
i think he is missing some data.....or it is in the tailings pile. i think january may be a surprise for him.
Kid has just been BTFD'ing the ES, but figured the only way to get his mug on the tube was by repackaging himself as some sort of guru.
That's one of the main differences between Americans and Europeans. Whilst Europeans tend to be drawn to ideas, Americans are drawn to "personalities".
Well he believes what he's saying but he seems to be quoting official data so I don't think he's quiet got to grips with the system that he proposes to impliment. Completely agree this is the future of investing. I always assumed that this is how investors did things anyway.
This is simple to analyse:
-He is young, invincible, never had any real setbacks
-He has a PhD, this is high on the social proofing list in the USA, thus he is alway right about everything
-He rode a 6 year bubble in QE pumped up equities
-He is rich
-...and now he believes his own bullshit.
He rode a 6 year bubble in QE pumped up equities
Exactly. Got lucky and now thinks he has a "system".
Hey math genius, show us your "funds" performance from Sept 19th to October 16th 2014! Otherwise I call BS...
Lets first start examining what he is actually modelling with mathematical algos.
A corrupt manipulated market that is targetted up or down to fleece the sheep.
Remove all the corruption and manipulation I would not be so sure that the algos he created will actually work in any return to a legitimate chaotic trading system.
Machine learning can be marvelous, but in highly instable, unpredicted environment like markets it can be disastrous, unless it take in account the "news" (for example FOMC declaration) in his algorithm.
Also when an event goes outside their statistic and models it tend to be disastrous in term of losses, anyone remember Lehman Brothers ?
That 25 year old math phd won't make any money with his ideas until the existing one "explodes"!
Stand in line and take a number kid!!!!
prove it... and if the system works, why tell anyone... ??? just sit back and print money...
i think math only works in a rational environment, so how to factor in irrational (exuberance).. ???
" ...trades the market by "using data to mine information before it is encoded into the markets."
Key words: considerable time.
its funnny how many haters are here
he trades derivatives and takes a long term view, he isnt front running anyone
hes using his brain to make decisions, soomething most people cannot do.