Knowledge level needed to run a hedge fund?

[Anastasios]

Can one run a smaller hedge fund with the knowledge acquired from a PhD in financial mathematics?
Would it be better to work as a quant, after one has gotten a PhD, to gain some experience?

 

[Keith Tan]

i hope you're joking

 

[alain]

Can one run a smaller hedge fund with the knowledge acquired from a PhD in financial mathematics?
Would it be better to work as a quant, after one has gotten a PhD, to gain some experience?

you don't need a degree to run a HF. You just need to convince people to give you money to manage for a fee.

 

[diegosanaz]

And people don't give their money to someone without experience...

 

[Canuck]

The gnomes had it right all along:
http://upload.wikimedia.org/wikipedia/en/d/dd/Gnomes_plan.png

 

[Polter]

Definitely! But it has to be in differential geometry.
(The remaining phases just as in the Michael's picture and you'll be fine!)

 

[Canuck]

Seriously though to be rigorous you have to consider minkowski.

 

[mfegrad]

one could make a very convincing argument that the act of posing this question provides its answer...

 

[Anastasios]

I guess my question came across as unserious.

I have some capital of my own and I want to become a quant. Will the skills I acquire as a quant be enough, or do I need a whole team of quants, programmers etc to make it work?

From what I have understood, I should have enough skills to make some profit. Having a team of quants and programmers will obviously yield more. I am wondering if a PhD is enough to make the machine ticking, to gather and analyze a bunch of data, develop and algorithm and implement it - will I have sufficient skills to do this solo, or is it a team project?

 

[diegosanaz]

I have seen people from undergrad investing their money in "x" platform and making a profit. Fron PhD you will be able to develope trading ideas. There is no education requirement that makes a good trader.

I recommend "Fooled By Randomness", you can see there is more about managing risks properly than anything else.

 

[Keith Tan]

I guess my question came across as unserious.

I have some capital of my own and I want to become a quant. Will the skills I acquire as a quant be enough, or do I need a whole team of quants, programmers etc to make it work?

From what I have understood, I should have enough skills to make some profit. Having a team of quants and programmers will obviously yield more. I am wondering if a PhD is enough to make the machine ticking, to gather and analyze a bunch of data, develop and algorithm and implement it - will I have sufficient skills to do this solo, or is it a team project?

i see you're still in fantasy land.

it's not about the number of employees your firm has, it's all about your "profit-making system".

say your system has been making a profit for the past "n" periods: but at what risk? what is the client's VaR? what is your alpha and what makes it so special from the rest? say all of your factor models have been predicting accurately for the past periods. how will it react to the next recession and how much is at stake? even if 1 factor in your model is out of place, you better give a darn good explanation at why the market doesn't go as you've predicted. i don't really care if you're a quant or phd (which has nothing to do with the above), but if you're managing mine or someone else's money, you better not screw it up and reap in the profits as you've claimed. and the only way to judge you is by past experience.

wall street has plenty of stories on top dog HFs reaping in billions, only to go bankrupt in the recession. we don't need another case study to screw up people's life savings.