Hi everyone,
Point 72 has just let go of seven long-short equity portfolio managers !!
As far as I know, Steve Cohen was himself a long-short equity trader.
Do you think the long-short discretionary portfolio managers are getting replaced by systematic/quants managers?
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No, that's not how that works lol
I don't know the specifics of this scenario, as 7 at once isn't the norm, but PMs getting axed at big platforms is the norm. They're not getting replaced, they just didn't generate returns.
You probably know that Point72 runs Cubist Systematic Strategies. Despite their dissapointing returns in some years, I dont hear much about firing analysts or managers. Actually quite the opposite Quant seems to leave willingly for better oppurtunities.
For example look at Ross Garon, Head of quants at point72, he leaves for Millennium !!!
This true across all strategies, people leave to move funds all the time. The way multimanagers work is that when you hit your drawdown, you get fired. It’s natural in the business. You probably have the same thing going on in quant
Wait putting whatever this guy is yapping about to the side. How the fuck does one become global head of quant with a bachelors in social studies
Anyone know which ones?
From a concerned employee lol
per public news reports - can't vouch for accuracy.
What's Everpoint and how's it different from the pods directly under the Point72? Saw on their website that Everpoint is also l/s equity
Everpoint has had a lot of turnover - mix of reasons but interesting. I don’t get the sense it’s going nearly as well as Steve thought it would.
Theres some pretty solid investors and really good humans in that list, always hate to see it but its part of the deal unfortunately
Quants can have a transferable skills outside the finacial industry in case they were fired.
Other financial analysts have no tranferrable skills that is why they have higher rates of suicide.
Better be honest to benefit others than to be eaten by EGO.
lmao what the fuck are you on about? There are tons of degrees in something other than finance (law, literature, philosophy, history, healthcare, mathematics etc.) and tons of ex-Wall Street have thrived in other areas.
Jeff Bezos left to build Amazon. Jeff Weiner was in M&A at WB. Phil Knight was in PWC. And there are hundreds of ex-Wall Street people in government.
If you just refuse to understand the importance of qualitative analysis, no wonder you’re just a consultant. I have never met a quant that just shrugged off qualitative analysis.
No. There is not a single model that can exactly predict what will happen, or else the stock market would not exist.
Quali analyzes intangibles, Quant focuses on numbers. That is the difference, just 2 different approaches, not necessarily superior to one or the other.
Besides - plays, at their core, are narratives. Businesses are, fundamentally, stories. These change constantly, and a model is utterly dependent on the input data. So quali will ALWAYS be important.
But above all, if ya make $$$ then you will always be around. I genuinely do not give a single flying fuck if you deep dive for 12 months or gamble on a whim, if you use quant or quali - if you consistently make significant, positive returns, you good.
Of course there is no single model that can predict the future in markets or in the universe with 100% accuracy.
All models are approximation of reality not reality itself.
That being said, these quant models being very diverse and cant be described in one phrase, however they tend to be more objective, given the laborious process of model development, calibration and re-caliberation, and back testing with massive historical and new emerging data.
On the other side the fundamental, as you said yourself take the intangibles which in themselve are subjective biases. Example, "I think company has poor managemnet" or "this ceo has bad history, therefore I am not optimistic" based on your own self biases about what it means be be a good manager and the small sample (this ceo with poor past) to predict his future behaviour in this company !! like one Quant manger put it this way "Historical data does not predict the future but you fundamental analyst have a crystal ball"
Risk and diversification is very different in Quant models VS fundamental. True diversification of risk is a quantitative process requires more breadth (larger sample of stocks within your portfolio) for better risk-adjusted returns. Meanwhile in fundamental, its deep subjective assessment of fewer companies, therefore higher risk of subjective biases.
All that being said, you are right what matters is the returns, however to be honest if you get fired, a quant degree can land you a job in tech, healthcare,.. as a data scientist which is an important factor for an industry known to have high layoffs.
Fairly typical of the data scientists I've met in the industry, don't really *get* how fundamental strategies make money and too closeminded to consider many perspectives. I make a lot of use of big data and SQL/Python in my fundamental process but the stuff that matters over a 5+ month horizon doesn't exist in discrete or structured format to feed to your model. Even if it did, considering all the millions of things that *could* matter for a thesis and the hundreds that do, there is too much uniqueness to each situation to be mathematically pushed away.
Where do you draw the line between 'subjective biases' and... judgement. Again I'm a proponent of using data where it is helpful and for risk overlap and portfolio optimization - quant models are wonderful at hedging out all risk (and return). Learning what risk to TAKE and incorporating info from the tangible/real-world has and will make many people great returns
I get your point that for discrete-info-in/discrete-actions-out backtesting and calibration etc is great
Commonly run across the archetype of the frustrated quant who just doesn't *get* fundamental side and loves to conflate himself with quant and quant with superior. Usually found trying to work together with such tends to waste more time than save, because they dont ask enough questions and dont look from other perspectives. Hope that's not you and you're just a young guy yet to be humbled in the field
Delete
I am not a quant, I am a consultant to a sovereign wealth fund and have been exposed to quants and analysts in my field of consulting. There is no conflict of interests to defend one over another from my side.
I do not know how your statement about using SQL/Python and big data is relevant, I assume you want to say that you are mini-quant (Is my subjective intrepretations about you is true and valid ? If not maybe we need to be more cautious about subjective biases).
Quants strategies are more objective, that is a fact not for argument unless we have to re-define words like objective and subjective. They can be veiwed and tested, even within dark boxes of algorithmic trading/machine learning if you undersatnd the principles underlying the process.
If a hedge fund gave a similar response like yours in a meeting with the sovereign wealth fund that I work for, I would remove that hedge fund off their list for good.
So u believe discretionary l/s managers are inferior to quants is because quants are objective discretionary investing have too much subjectivity with variables such as “I like this management team” and ur evidence and reasoning to back this is……….
Quants u were exposed to are clearly smarter human beings (unlikely u understood their technology given ur a consultant for an allocator). Not objective data like which strategy delivered more alpha or had a higher sharpe ratio or whatever bespoke metric you guys developed to better understand who is better at delivering uncorrelated returns. Isn’t this a bit ironic?
Also why are you acting like all discretionary guys do is sit around and talk about “do you like management” as if most p72 guys aren’t grinding out hundred if not thousand line models and analysis for each name they cover based on 50 expert calls, harassing management, and a shit ton of alt data
The current trend at our soverign wealth fund is to gradually remove all discretionary hedge funds from our portfolio over the coming years and replace them with Qaunts hedge funds.
But I wish you the best of luck in your career.
Thank you.
I really hope someone is else is calling the shots are your sovereign wealth fund, cause how can one rely on a consultant that clearly does not understand what quants and fundamentalists do is unbelievable. And the arrogance…wow.
I sincerely wish you to have the mental clarity to seek information in order to provide the opportunity for you to be thoroughly humbled. You desperately need it.
I really hope someone is else is calling the shots are your sovereign wealth fund, cause how can one rely on a consultant that clearly does not understand what quants and fundamentalists do is unbelievable. And the arrogance…wow.
I sincerely wish you to have the mental clarity to seek information in order to provide the opportunity for you to be thoroughly humbled. You desperately need it.
I really hope someone is else is calling the shots are your sovereign wealth fund, cause how can one rely on a consultant that clearly does not understand what quants and fundamentalists do is unbelievable. And the arrogance…wow.
I sincerely wish you to have the mental clarity to seek information in order to provide the opportunity for you to be thoroughly humbled. You desperately need it.
I really hope someone is else is calling the shots at your sovereign wealth fund, cause how can one rely on a consultant that clearly does not understand what quants and fundamentalists do is unbelievable. And the arrogance…wow.
I sincerely wish you to have the mental clarity to seek information in order to provide the opportunity for you to be thoroughly humbled. You desperately need it.
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