Do Quants actually know how to invest?

[Enrique]

I've always wondered about this. Are quants capable of effectively investing, or is that more of the investement banker's thing? Thank you.

 

[yetanotherquant]

Do Quants actually know how to invest?

According to my personal experience, most of them don't.
However, you should clearly understand that quants (unless working in trading) live in the risk neutral world (Q-world) and have to do with derivatives.
And an ideally (or at least properly) hedged derivative can bring neither profits nor losses.

Of course you can hedge "improperly", e.g. being Gamma long/short and making (or losing) money with it. That is what [front office] quants actively do. But this is a pure speculation, not an investment.

As to investment in conventional sense of this word, quantitative skills are very helpful (first of all for money management/asset allocation) but you also have to understand micro- and macro-economics, be able to read balance sheets and follow news (nowadays FED monetary policy is the most important topic).
Combining it all, one can achieve good performance, have a look at my folio:
Somewhat better than DUCKS

And read in my book how I do it:
http://www.amazon.com/dp/3000465200/

 

[Enrique]

According to my personal experience, most of them don't.
However, you should clearly understand that quants (unless working in trading) live in the risk neutral world (Q-world) and have to do with derivatives.
And an ideally (or at least properly) hedged derivative can bring neither profits nor losses.

Of course you can hedge "improperly", e.g. being Gamma long/short and making (or losing) money with it. That is what [front office] quants actively do. But this is a pure speculation, not an investment.

As to investment in conventional sense of this word, quantitative skills are very helpful (first of all for money management/asset allocation) but you also have to understand micro- and macro-economics, be able to read balance sheets and follow news (nowadays FED monetary policy is the most important topic).
Combining it all, one can achieve good performance, have a look at my folio:
Somewhat better than DUCKS

And read in my book how I do it:
http://www.amazon.com/dp/3000465200/

I appreciate your response and will look into the links you provided.