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Why is financial research useless?

Posted: March 27th, 2014, 7:48 am
by Gamal
QuoteOriginally posted by: PatMaybe properly augmenting our sigma algebras with sets of exterior measure zero truly is the nightmare keeping our traders awake at night, and is going to engenger the next global financial crisis.Curious. Has anybody seen a "properly augmenting our sigma algebras with sets of exterior measure zero truly" in a paper of Nicole or late Marc Yor?They did really know the theory, hence didn't bother with constructions already done and did begin their papers with: "Let (Omega, F_t, P) be a probability space satisfying the usual conditions." The end with sigma algebras.Those guys know neither finance nor mathematics.

Why is financial research useless?

Posted: March 29th, 2014, 2:48 pm
by dweeb
Any thoughts from practitioners as to what problems are currently important or unimportant to finance research??

Why is financial research useless?

Posted: March 29th, 2014, 9:00 pm
by Gamal
FVA

Why is financial research useless?

Posted: March 30th, 2014, 12:00 pm
by bearish
QuoteOriginally posted by: GamalFVAI agree, although you probably meant for it to be in the "important" category.

Why is financial research useless?

Posted: March 30th, 2014, 12:15 pm
by Gamal
Sure, replying a question literally is always dangerous, especially a question like "what problems are currently important or unimportant?"Three logicians walk into a bar. The bartender asks, "would all three of you like some beer?" The first one replies,"I don't know." The second one replies, "I don't know." The third replies, "Yes."

Why is financial research useless?

Posted: April 8th, 2014, 8:14 pm
by Orbit
QuoteOriginally posted by: PatThe SABR model got published in Wilmott (which turned out to be a very good decision!) because I got tired of arguing with editors of top-notch academic journals, who were telling me how fixed income desks operated in banks. Pointing out that I worked on a fixed income desk, and had a good take on how the other fixed income trading teams in NY operated, and which problems were important or unimportant to our trading teams, didn't dent their conviction of their own righteousness. Since I'm a practitioner, apparently I am automatically in either the unenlightened (if they are being nice) or "mentally slow" category. Maybe they're right. Maybe properly augmenting our sigma algebras with sets of exterior measure zero truly is the nightmare keeping our traders awake at night, and is going to engenger the next global financial crisis.Pat,Cool. I didn't know that. I'm glad you took that course of action!

Why is financial research useless?

Posted: September 25th, 2014, 6:28 am
by Gamal
Next question in the same area - why publish? A couple of my papers were printed in Risk or elsewhere, it didn't help me find any job nor in any other form AFAIK.

Why is financial research useless?

Posted: September 25th, 2014, 12:30 pm
by slacknoise
QuoteOriginally posted by: GamalI did recently browse several financial jounals. What a crap!80% agreed

Why is financial research useless?

Posted: September 25th, 2014, 3:19 pm
by daveangel
QuoteOriginally posted by: bearishQuoteOriginally posted by: GamalFVAI agree, although you probably meant for it to be in the "important" category.Isn't FVA just a load of old tosh ?

Why is financial research useless?

Posted: September 26th, 2014, 6:53 am
by Gamal
What else left?

Why is financial research useless?

Posted: September 26th, 2014, 7:25 am
by daveangel
QuoteOriginally posted by: GamalWhat else left?prediction

Why is financial research useless?

Posted: September 26th, 2014, 8:15 am
by Gamal
Prediction is very difficult, especially about the future.

Why is financial research useless?

Posted: September 26th, 2014, 8:19 am
by daveangel
QuoteOriginally posted by: GamalPrediction is very difficult, especially about the future.indeed.. which s why we need the best brains in finance to work on this...

Why is financial research useless?

Posted: September 26th, 2014, 8:28 am
by MHill
Prediction is easy.It's getting the prediction right that's difficult.

Why is financial research useless?

Posted: September 26th, 2014, 8:36 am
by Gamal
There are some downsides of prediction:1. Unlike pricing and risk management it's not scientific - there're no rules that everybody may learn: if there're winners, there must be loosers.2. You make money with good predictions, so you don't publish them - publishing good predictions is just giving away money. You may be hence sure that all published predictions are wrong.3. Maybe best brains in finance work on predictions, maybe not, but one thing is sure - they are solitary and all start from the very begining. As Jim Simons states - all trades are separated, there're tricks but not rules. There's no giants to stand on their shoulders. BTW - how to tell a good brain from a worse one? By brain teasers? So you may find best brains in brain teasers, nothing more. Good in making money is only someone who makes money, that's all. John Meriwether was until until...