No finance knowledge needed for quant jobs?

Andy Nguyen

Andy Nguyen

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The article below cites Marcos Lopez de Prado as saying that crowd-sourcing the problem to thousands of data scientist is the way of the future. Do you agree with the premise of this article?

Under the "old paradigm" investment managers each hired their own siloed teams of researchers with specific finance knowledge, said Lopez de Prado. However, these in-house teams were hard to staff - very few quants combined the"domain knowledge" and quant expertise necessary to tackle finance data sets. “Consequently many complex investment opportunities were not arbitraged or exploited,” said Lopez de Prado, pointing out that only 0.65% of articles in key economic journals contain terms related to artificial intelligence.

Faced with a dearth of finance quants, Lopez de Prado said finance firms have innovated. Instead of hiring their own quant finance teams who understand the market, buy-side firms are increasingly inviting quants of all backgrounds to compete in tournaments aimed at deriving forecasts from large generic-seeming data sets.
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Prediction is difficult, especially predicting the future.

If you claim something, then it should by backed up by examples and not wishful thinking. What do I know.

I have yet to see a convincing example of Machine Learning replacing PDE models. Regulators need to be convinced, especially with black boxes.

// This year I have supervised MSc students on ML+PDE (Black Scholes, Heston, SABR models) from University of Birmingham, UK.
 
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That sounds like one San Francisco firm found one way to cheap out on its labor costs in a way that relies on other firms employing people to develop and maintain the skills that the original firm wants to use. If that model ever caught on then all the quants would busy themselves doing other things and then no one would be able to use their skills.
 
"AI and Data Science in Trading Conference" I'd imagine AI and Data Science is what, 15% of the whole pipeline?
 
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