In praise of ignorance November 5, 2009 at 8:29 am
In typically breathless style, Zero Hedge picks up a recent survey by reported Finextra.com of quantitative analysts:
A staggering two thirds of quantitative analysts think their supervisors do not understand the work they do
Now these numbers are likely to be distorted, firstly because the survey was done by a training provider, and secondly because there is a natural tendency for people to think that their boss knows nothing. Nevertheless, the fundamental proposition that the people who manage investment banks do not understand the details of quant trading is likely to be mostly true. It can hardly be a surprise that people who have been away from mathematics for thirty years, and trading desks for ten, are not in touch with the state of the art. What is more impressive is when the managers admit this. I once spoke to a very senior investment banker at a leading bank with regulators present: he frankly admitted that he had no idea how it all worked, but that he had people who worked for him did. He then explained the controls around the business: they were comprehensive and effective. Sometimes honesty and fear of the unknown produce a positive effect.
