The Masters in Finance Arts Department

Bid and Tonic 8

If I had to pinpoint what made me want to write for a living, it would probably be related to how I obsessively read Sports Illustrated end to end growing up. I truly grew up in the golden age of sports: if you started watching sports when I did, in the early 2000s, you arguably saw the peaks of the NFL, NBA, PGA, ATP, NCAAF, Soccer, NCAABB, and now NCAAWBB. When I took the PSAT in 10th grade, I remember writing that I wanted to major in Sports Journalism when I went to college, rather than anything technical. Thanks for not letting me major in liberal arts, dad.

I did manage to make it “work” in the end,

…the first finance internship I applied to in May, 2016, was not at an investment bank or a market-making firm, but Investopedia:

I would say the few things that I am the most passionate about are the areas of mathematical and behavioral finance, journalism and literature, and chess. I am a book junkie at heart - I have read a plethora of books about the 2008 crash, the infamous Enron scandal, and many topics in between. This naturally lead to an interest in classic literature and my own writing, where I focus on insight into modern day topics, unique viewpoints on current events, and perhaps introducing an area unique to a reader.

Called my shot pretty accurately, eh? Turns out, who needs churn content with no moat?

though one day I would like to actually get paid meaningfully for what I put out. Perhaps I could more accurately phrase it as “I write while living”. Anyway, I digress.

Something you hear a lot when you take writing-oriented classes is that all writing is autobiographical. And, while this is obviously true, I’d modify this slightly — all writing is fictional. Facts certainly don’t care about your feelings, but for anything you read that has depth beyond the kiddie pool, they’re not exactly real.

I always wanted to write fiction first and foremost, and if you search “Acela to the End of the Line” on this site, you can find my various riffings on the format, where I have to heavily restrain myself from writing too much autofiction because, as it so happens, I’m not so far removed age-wise from the events and people I’ve hybridized.

But beyond journalism, in a sense, all financial analysis is a bit of fiction, which is why so much of the “actual” industry is about storytelling. A hedge fund is a story about why you should manage someone else’s money (as, really, the level of delusion required to truly believe you should be doing this at scale is Icarus-tier), a startup is a story about how you’re going to change the world (as I wrote about in Macbooks vs Wristwatches), and a prospectus or financial model is a story about bounding the possibilities of the future. As one of the greatest movie scenes ever highlights,

nobody, whether you’re Warren Buffett or Jimmy Buffett, knows whether a stock is going up, down, sideways, or in circles. It’s a fugazi.

Indeed, some of the highest praise I’ve ever received in response to my writing was this comment:

Technically, my degree is a BA in (pure) Mathematics, but truthfully, it should be a BS given that most of my college years were spent skipping class to trade and drink my way through lower Manhattan. Youth is really wasted on the young, perhaps my biggest regret is not spending more time chatting with my math professors.

I think this BS category should apply to finance degrees as well. I’ve written threads before on how finance is perhaps the most addicting field that’s incredibly boring to work in:

Finance is the only area where generalists can lap the field. This creates the paradox where it’s the most interesting thing to think about, as there’s endless rabbit holes, but actually working in the field isn’t interesting at all. Thus the best fund managers appear to do nothing at all other than post or talk their book endlessly.

Every actual role in finance is uber specific to the point of ridiculousness because it’s designed to disincentivize the urge to trade endlessly as much as possible. Yet the system only works if people are trading and the velocity of money is appropriate. I would estimate that in a week where I don’t have visitors/am not traveling, I spend a minimum of 14 hours a day reading and thinking and messaging. Almost none of this is actionable. And then on the weekends, I’ll make sure to take note of things like bar/mall foot traffic just to have some anecdata to contextualize other people’s words. And then, to actually trade profitably, you have to prevent yourself from anchoring too heavily on this! Being terminally online while sitting on your hands is basically necessary to avoid losing money. It’s truly one of the weirdest paths of life, basically nobody I interact with “gets” it.

This is why I don’t really take quant approaches to things. I understand the math and the ideas, but spending all the time proving why something should have edge ignores the fact that raw returns are the only things that improve your life and reward your investors. It truly doesn’t matter how you do it as long as you find a way that works, which is why the best trades are always conviction punts. It has to happen because it makes sense. The timing will never be predictable (other than expiry, that’s why all quant roads end at short vol) so betting on the logical outcome turns into guts and mental risk management.

While someone does in fact have to keep the books, make the pitch decks, and update the models, this is rapidly changing. I wouldn’t exactly say AI is going to obliterate all these jobs, but it’ll certainly make the life of a junior banker easier, but that depresses the pay, and why would you work in an ultra specialized, boring-as-shit role without the exponential upside of the bonus?

A couple posts ago, I mentioned that I was told to not go to grad school by none other than my dad on my birthday,

Infamous in Ven-lore is my dad telling me on my 14th birthday to not do a Ph.D, as I wouldn’t be capable of finishing it. One of the best bits of advice I’ve ever gotten, even though most people are horrified when they hear that bit, and shockingly prescient, as I dropped out of grad school.

and I think the advice is even more apt today, as I’m consistently peppered with questions about whether degrees in finance or the CFA are worth it, to which I really have nothing more to say other than a resounding no if there isn’t a direct causality between why you want the degree and where you want to end up. (E.g., an MBA or CFA where you are guaranteed a promotion/job upon completion is worth it, doing it speculatively is not.) I can almost certainly say that I’d fail a Series exam at this point, but this is due to the fact that academic finance is heavily outdated at the base level, and the graduate studies exist mostly for people without risk tolerance and/or capital. Ken Griffin’s basement is always going to produce the best quant research, and we’re going to see none of it until much, much later.

I think this is why my blog posts tend to be read by people who don’t trade full time more than the ones that do. Nothing is particularly actionable, as many, many posts are a result of the process of working out what exactly is racing through the grey matter into my head, running it by people to make sure I haven’t lost my mind, and formalizing the narrative in the form of a post. But making sense out of a complex system, even if you don’t happen to trade around it, is comforting and lets you sit on your hands and let the market do its work. After all, the structure is designed to go up over time and the liquidity is supposed to exist when you need it rather than society as a whole, which is why so much of a licensed financial advisor’s job is a form of therapy. When I was in high school, I remember talking to my dad’s account manager at his brokerage and asking “What do you do on red days?”, to which he replied, “mostly take phone calls and tell people to not sell.” The older I get, the more I realize that a good financial advisor is truly a white glove service at its finest, and once I hit “my number”, I plan on using one myself.

But for those who don’t want to pay a % AUM fee, or who are looking to start a career in the field, I am almost positive the “pipeline” is about to change rapidly within five years. I don’t think getting the formal finance degree is going to be of much use anymore — rather, I’d frame a “Masters in Financial Arts” as sort of a gymnasium consisting of a couple niche specializations (from what I gather, the biotech guys really clean up — my sector happens to be consumer retail, though don’t check ANF’s price this year) and an ability to generalize and connect every bit of information you come across makes up the best base for wealth management going forward, and that’s not going to change. The UFC can always alter the rules to nerf grappling, but the market is the market — there’s no centralized body making the rules. Some ability to code is probably useful, but soon enough, I think AI will be able to handle most of the rudimentary data analysis, and there are enough sell-side research analysts combing through 10-ks for you such that you don’t have to do it yourself. I still think abstract mathematical thinking is the most powerful tool I’ve ever acquired in my life, but I don’t think it’s necessary to take any class beyond Analysis and Algebra lest you get nerdsniped and spend your life overdosing on coffee for $30k a year while staring at the ceiling with a piece of chalk in your hand.

More importantly, I think the ability to skim efficiently and explain your thoughts — which writing certainly helps with! — is going to be the most valuable skill going forward, because people want to talk to people, not AI. I’m so fucking sick of chatbots and AI and outsourced support roadblocks, good lord.

And, above all, I’d say do the reading, don’t have it summarized for you. Edge is found in the single-instance niches that people overlook and AI is unable to extrapolate from more than anything else.

Now more than ever, we are seeing a total slop-ification of the algorithm. Knowing how to pick this out is an ability that scales with how much you read and write, and this is only going to become a bigger and bigger advantage going forward.

As to what I think will happen if “AGI” is hit, that’ll be explored in a soon-to-come post. Toying around with Deepseek has made me believe that we are much closer to “AGI” (by my definition, not the Deus Ex Helios definition) than we think — turns out all you need is a model that can be abused a little bit and isn’t hard-coded to give you anodyne output to get turbocharged output. I’ll meditate upon a bit more this after viewing von Neumann’s birthplace.