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Why I Dislike Talking About Trading and Investing (TT - S2E8)

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Dimitri Bianco

As someone who works in quantitative finance and runs one of the largest YouTube channels dedicated to quant finance, everyone wants me to talk about trading. First off, I'm not a trader and don't work for an investing firm. But the main reason is that everyone has an opinion on trading that they think is a fact. You really have two different camps and both are nonsense.

The first camp are the business people in traditional finance. They worship Warren Buffet and think you can simply look at cash flows to determine an assets value. They also like to create fairy tale futures about companies and why they will be worth a lot or nothing...even if it contradicts their simple cash flow theory.

The second camp are the quants or nerds. They bring in massive amounts of data and apply models blindly to everything. Once they get a number they are determined it must be a fact. They also want to tell you all about how smart they are because they do math.

The problem with quantitative finance is that we're modeling people and guess what...people aren't easily understood. Finance, economics, politics, and quant finance are all soft sciences that are based on people making decisions. I enjoy discussing the businesses in detail but realizing you need data and statistical theory to also support your ideas. I work in risk management so I need to try and find every reason why my idea is wrong. That's right! Look for what's wrong, don't look for why you're right/ Confirmation bias is one of the biggest flaws the human race has. So in summary...I just don't like talking with people who are over confident and lack enough real world experience to have an educated discussion about trading and investing. But who knows, maybe I'll add a few more videos on the topic.

Podcast version:
https://fancyquant.buzzsprout.com

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posted by BoydayKedsj