wndysrf Posted March 9, 2006 Report Share Posted March 9, 2006 The hottest ticket now in investment banking is learning the most esoteric computer and programming skills in order to produce more Black Box Auto-Trading models. Excerpts from today's WSJ: Why Students Of Prof. El Karoui Are In Demand French Math Teacher Covers Structure Of Derivatives; Banks Clamor for 'Quants' A Lesson on 'Smile Risk' By CARRICK MOLLENKAMP and CHARLES FLEMING When Xavier Charvet applies for a job at an investment bank next year, he thinks he'll have an advantage. The 24-year-old French student's resume begins with the phrase: "DEA d'El Karoui." That stands for the postgraduate degree he is studying for under Nicole El Karoui, a math professor in Paris. She teaches skills required to create and price derivatives, the complex financial instruments based on stocks, bonds or loans. "When I talk about El Karoui's master's, everyone knows" about the degree, says Mr. Charvet. As derivatives have become one of the hottest areas for the world's biggest banks, Ms. El Karoui, 61 years old, has become an unlikely player in the business. Her courses at the prestigious Ecole Polytechnique and a state university, in such rarefied subjects as stochastic calculus, have become an incubator for experts in the field. A resume with her name on it "is a shortcut because you don't need to train the person on the basics of derivatives," says Rachid Bouzouba, a former student who is now head of European equity trading at the London office of Lehman Brothers Holdings Inc. The derivatives departments at banking giants J.P. Morgan Chase & Co., Deutsche Bank AG, Dresdner Kleinwort Wasserstein, and France's BNP Paribas SA and Societe Generale SA include many of her prot?g?s. The high demand for her students reflects big changes in the global banking industry. Investment banks used to make much of their money from underwriting and trading stocks and bonds, or providing mergers-and-acquisitions advice. They hired people with a wide range of academic experience, including liberal-arts and science graduates. In recent years, profits from trading and selling derivatives have come to rival those from stocks and bonds at many banks. On average, revenue from derivatives based on stocks now accounts for about 30% of an investment bank's total revenue from stock-related businesses, according to a Citigroup Inc. report issued in January. The 75 or so students who take Ms. El Karoui's "Probability and Finance" course each year are avidly sought by recruiters. Headhunters say Ms. El Karoui's graduates can expect to earn up to about $140,000 a year in their first job, including a bonus, once they complete an internship that constitutes part of her course. After five years, they could be earning at least three times as much. Link to comment Share on other sites More sharing options...
Drano Posted March 9, 2006 Report Share Posted March 9, 2006 I hope Foxie sees that. Link to comment Share on other sites More sharing options...
termin-Al Posted March 9, 2006 Report Share Posted March 9, 2006 Hey Mark, Isn't it about time for a new avatar? Link to comment Share on other sites More sharing options...
Black Prince Posted March 9, 2006 Report Share Posted March 9, 2006 Wowzers, we are in a Putz window, Ure's fractal guy is looking for a nonlinear drop a week from Monday and IDS is a ghost town. Can it get any better than this? Link to comment Share on other sites More sharing options...
Drano Posted March 9, 2006 Report Share Posted March 9, 2006 Hey Mark, Isn't it about time for a new avatar? <{POST_SNAPBACK}> He could use this one, since Aussiebear didn't want to use it: Link to comment Share on other sites More sharing options...
FauxCaster Posted March 9, 2006 Report Share Posted March 9, 2006 IDS is empty because this rip, roaring economy has reached full employment and there are no stoolies left without high paying jobs that fully satisfy them. This economy is HOT, we are primed for take off!! I suggest stocks, bonds, commodities, annuities, real estate --- they are all going to the moon. Link to comment Share on other sites More sharing options...
Bungster Posted March 9, 2006 Report Share Posted March 9, 2006 IDS is empty because this rip, roaring economy has reached full employment and there are no stoolies left without high paying jobs that fully satisfy them. This economy is HOT, we are primed for take off!! I suggest stocks, bonds, commodities, annuities, real estate --- they are all going to the moon. <{POST_SNAPBACK}> Really.... oh, you make yoke white man..... Bung Link to comment Share on other sites More sharing options...
Guest libertas Posted March 9, 2006 Report Share Posted March 9, 2006 Wowzers, we are in a Putz window, Ure's fractal guy is looking for a nonlinear drop a week from Monday and IDS is a ghost town. Can it get any better than this? <{POST_SNAPBACK}> We are always in a Putz window. However, we are also in a Puetz window. Link to comment Share on other sites More sharing options...
Guest Posted March 9, 2006 Report Share Posted March 9, 2006 *snip* I answered a job ad from Dunn Capital a while back. They were looking for math geniuses (which I'm not) to cook up new and Byzantine trading systems. I found this odd, since I always saw them as part of the old guard who believe (in my view, correctly) that you just need a straightforward model with a positive expectancy (like what they've been using for 30+ years), and once you've got that you spend the rest of your time making contingency plans for black swans (a la Nassim Taleb). As Jason Russell said, the hard part isn't cooking up these models, it's finding people with the discipline to trade them. But I'm speaking from an academic viewpoint here. Maybe Michael Covel and Jack Schwager have merely convinced me of a lost world that Pig Man machinations have since destroyed. Link to comment Share on other sites More sharing options...
Keyser Squishy Posted March 9, 2006 Report Share Posted March 9, 2006 I think we simply see more posts when the markets are actually moving significantly, one way or the other. The direction of the movement determines the tone of the posts. I don't take a scarcity of posts as particularly bearish or bullish, more that the market just isn't doing anything overly exciting. Personally, I've been watching oil and metals for a day and a half waiting for an intraday cycle upturn, which I feel is due... once again however, indicators have been pinned all afternoon... ostensibly so that the Pigmen can gap em up or down tomorrow morning as they see fit, trapping traders who hold positions overnight and preventing those who don't from participating in significant moves at the turning points. Or maybe I'm just being paranoid... Me watching the action this afternoon: Link to comment Share on other sites More sharing options...
FauxCaster Posted March 9, 2006 Report Share Posted March 9, 2006 Buffet & Munger reading M2M? You be the judge Buffet: "There are more people [like hedge-fund managers] that go to bed at night with a hair trigger than ever before, it's an electronic herd, they can give vent to decisions that move billions and billions of dollars with the click of a key. We will have some exogenous event, we will have that. There will be some kind of stampede by that herd.... "When you have far greater sums than ever before, in one asset class after another, that are held by people who operate on a hair-trigger mechanism, then they lend themselves to more explosive outcomes. People with very short time horizons with huge sums of money, they can all try to head for the exits at the same time. The only way you can leave your seat in burning financial markets is to find someone else to take your seat, and that is not always easy...." Munger: "The present era has no comparable referent in the past history of capitalism. We have a higher percentage of the intelligentsia engaged in buying and selling pieces of paper and promoting trading activity than in any past era. A lot of what I see now reminds me of Sodom and Gomorrah. You get activity feeding on itself, envy and imitation. It has happened in the past that there came bad consequences." Buffett: "I have no idea on timing. It's far easier to tell what will happen than when it will happen. I would say that what is going on in terms of trade policy is going to have very important consequences. " Munger: "A great civilization will bear a lot of abuse, but there are dangers in the current situation that threaten anyone who swings for the fences." Buffett to Munger: "What do you think the end will be?" Munger: "Bad." http://armchairgenius.blogspot.com/2005/05...eal-estate.html Link to comment Share on other sites More sharing options...
Black Prince Posted March 9, 2006 Report Share Posted March 9, 2006 Oh darn libertas, now everyone a knowin' I can't spell. Link to comment Share on other sites More sharing options...
tdultima Posted March 9, 2006 Report Share Posted March 9, 2006 short and intermediate indicators both pointing down looks bearish to me Link to comment Share on other sites More sharing options...
fxfox Posted March 9, 2006 Report Share Posted March 9, 2006 I hope Foxie sees that. <{POST_SNAPBACK}> I just read it. Very interesting. But im not that math guru, only average. Im also not visiting the Ecole de la Schmol or how it is called. Im applying for an internship as a trader, at Deutsche Bank i directly appllied for an internship as an FX Option trader. We will see whats gonna happen. Regarding my english skills i always said "excellent" Link to comment Share on other sites More sharing options...
FauxCaster Posted March 9, 2006 Report Share Posted March 9, 2006 I can't believe Cramer is now pimping a 9/11 stock: OSIS He's pitching the same airport security pump-n-dump they did in 2001-2002 to goose these stocks. This just in: airports need security. Buy now. Link to comment Share on other sites More sharing options...
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