Hedge Fund LIVE - An Interactive Trading Community

Brent S. - Cornell

Some Friday nights are lonely…

In two weeks, I will be done with my final final. In two weeks, I will be officially done with school and homework and assignments. In two weeks, I will be shit-faced; out with my friends celebrating the completion of a needlessly difficult exam and the end of coursework for the completion of my masters in financial engineering. But for the remaining 14 days I will be anxious, excited, depressed, deflated, disappointed, hopeful, and worrisome along with a whole host of other feelings. But it doesn’t matter. You do what you have to do to accomplish a task.

Honestly, if my life was governed by extremely predictable activities that produced a very small range of emotions I would feel like I was missing out on the possible extreme upside of life.


Ireland: denies bailout request (?) but gets the implied backing anyway. Then eventually acknowledges they need it…okey doke.

I have officially switched from the wsj to the FT. The FT is like a daily version of the Economist, has shorter articles, and does not break articles up over pages. It is also a shorter daily read than the wsj, in terms of pages, that is…

Anyway, thoughts always appreciated.

now, times for poker….

Ah, the job hunt…

Applying for jobs is an annoying hassle; all of the forms, follow ups and denials are time consuming and draining. Sometimes interviews go great and it takes the firm a full week to tell you you are not the one, or that the ‘fit’ is not all that great. The word ‘fit’ has a new meaning in this context. ‘Fit’ actually means that the interviewers may have liked you but they liked someone better, or that they didn’t like you at all and just needed to deliver the denial message in a way that allows the firm to maintain its professional facade. Either way you didn’t get the job and are now still looking for the opportunity of your dreams. Something that is stimulating, high-octane and puts your degree to work would be great but is it asking too much? Should we be glad to have a job at all? When do we become spoiled babies in the job quest; turning down jobs we don’t like only to try to upgrade with something less cranial but pays more or is more high profile?

My rational for this issue goes something like the following: To a large extent my job ambitions are driven by the kinds of jobs I see the others in my program getting. Everyone wants to be a trader and when I see people getting those jobs I get a glimmer of hope that I may be able to nail one of those jobs also. But maybe I can go a bit further. A trading shop that shall go unnamed is somewhat infamous for its training program that utilizes poker as the medium through which to teach people to trade. I happen to play a lot of poker and feel that trading may be a natural extension of a hobby I have read about extensively and play regularly, taking careful notice of my play and always trying to improve. Is trading a good fit for me? In poker losses are locked away each night. You hit your pillow with losses in mind, not risk — actual losses. So in many ways poker is easier to handle than trading. My career is not on the line every time I decide to see the flop but with trading the risk-bearing may be difficult to adjust to. How many days a week (or in a year) do I want to be worried about my job?

If I see an opportunity that presents positive expectation I will take it. I once had a friend offer me a bet (he’ll pay me $100 every time a heads comes up on a coin flip if I pay him $50 every time a tails comes up — he insisted he was ‘lucky’). So I won $500 that night for about 5 minutes of work (He paid me cash that night. No, alcohol was not involved). And this guy is a trader. A good one. He’s smart but a little crazy and thrives on risk.

Can I be this person? My tolerance for risk is pretty high but I will not know until I am going to sleep with risk (and how well I sleep) how good I am or could possibly be.

Thoughts? I may be way off base here so I am always open to criticism.


So me and 3 other students in the FE program have been asked to give a short presentation about some current topics. Each of us has chosen 2 topics and we’ll decide which 3 of the 8 to use this sunday.

So far I am suggesting the waning confidence in the US. Some evidence: 30-yr mortgages are yielding less than corresponding US treasuries, Gold and other commodities are soaring (silver, cotton, coffee), dollar is weakening, and (my favorite) CDS on UST debt exist. Period. People are buying insurance that will pay off if the US defaults on its debt…Now, I’m not quite sure how this will work given that the currency the CDS is likely written in belongs to a country that likely holds a great deal of US debt but…

Anyway, that’s just one interesting topic.


building an implied vol curve…

I am at our client’s office right now working away with a group of other financial engineering students. We have been contracted somewhat to update their implied vol curve more regularly (right now they do it twice daily with a very simple-looking curve and we’re going to update it every 5 or so minutes) and it looks like we’re going to deliver. The group is relatively large; we have 8 members. So communication is paramount. To a large extent, this is my role within the group.

I handle all client interaction and act as the as the face of the group to the professor in addition to running all meetings. I am simultaneously admin and representative, contact point and scheduler, arbiter and facilitator. It is an interesting role and I am absolutely loving it.

On the entrepreneurship side, it looks like we are going to get the university channel up and running pretty soon. I just spoke with a leader of a club at Cornell that has 12 financial engineering masters students in it and they are extremely excited to get their hands dirty with some actual trading. This is where HFL comes in. The website provides the necessary forum to bat around ideas and compare thoughts. It is a training ground and an information source and the university angle is the next step in this evolution.

Hmmm…I have been charged with coming up with a current topic for discussion for class next week. Should be fun. Expect a post on whatever we come up with.


Cornell FE bloggin from the client’s office.

A big part of my degree program in financial engineering at Cornell is the industry partnership project. Teams of students get paired with clients to implement a real-world initiative. So my team gets a healthy dose of proramming experience and a large amount of exposure to real coders in the industry. The environment is motivating and we spend a lot of time here refining the project and receiving feedback. Without questio, a positive experience.

My interaction with HFL is a completely separate topic. I do a fair amount of reading on my own and HFL gives me an opporunity to interact and ask questions frequently and receive almost instant feedback. Aside from the trading aspect is the entreprenuerial side of HFL, which I also ask a lot of questions about. There are difficulties associated with setting up a business that these guys  have solutions to from their own experience.

This week:

Elections (Rep House)

The Fed ($600B)

and plenty more as a try to figure out where I fit in the financial community.

More to come in the future…