Escaping The Sisyphean Trap: How Quants Can Achieve Their Full Potential (Seminar Slides)

Abstract

Investing can be characterized as a data science problem. While investment firms have attracted scientific talent, they have done a poor job at developing it. Firms hire specialists, but entice them to become generalists (e.g., portfolio managers). Under the ubiquitous silo/platform structure, quants succumb to the Sisyphean trap, and do not achieve their full potential.

A research lab structure offers a unique environment for developing scientists, by means of: (a) co-specialization, working in a highly cooperative lab environment; (b) tackling well-defined open investment problems; and (c) applying the scientific method.

Keywords: Quantitative investing, scientific method, machine learning, Sisyphean trap, hedge funds

JEL Classification: G0, G1, G2, G15, G24, E44