Business Insider had a story recently about working life for quants, the people who write the algorithms for high frequency stock trading on Wall Street. Quoting former quant Jennifer Goldson:
““In my days as a quant, I sat behind a desk with two phones and eight computer screens towering over me. It’s very hard to draw yourself out of that world. You’re attached to the markets. You’re attached to your phones. You’re attached to your Excel spreadsheets and whatever else you’re building quantitatively. That’s all day, everyday.””
Wired recently explained how this can play out in financial markets:
“The reason the quants win is that they’re almost always right—at least at first. They find numerical patterns or invent ingenious algorithms that increase profits or solve problems in ways that no amount of subjective experience can match. But what happens after the quants win is not always the data-driven paradise that they and their boosters expected. The more a field is run by a system, the more that system creates incentives for everyone (employees, customers, competitors) to change their behavior in perverse ways—providing more of whatever the system is designed to measure and produce, whether that actually creates any value or not.
On a managerial level, once the quants come into an industry and disrupt it, they often don’t know when to stop. They tend not to have decades of institutional knowledge about the field in which they have found themselves. And once they’re empowered, quants tend to create systems that favor something pretty close to cheating. As soon as managers pick a numerical metric as a way to measure whether they’re achieving their desired outcome, everybody starts maximizing that metric rather than doing the rest of their job—just as Campbell’s law predicts.”
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