Starting Physics PhD Student - Finance is intriguing - basic question

[Totally]

Hi everyone,

I lurk on the forums every now and then and I am now much farther along in life as to the last time I was here. I've graduated undergrad and am starting a Physics PhD at a top school in the US - name is irrelevant for now, but if you must know, you can message me. The reason I am doing the PhD as of now is because I love physics and am going to enjoy research for the next 5ish years on something I consider fascinating, not because I want to get a better foothold into quant jobs.

That being said, I have been investing my money in the stock market for over half of my life and the idea of using computers for the purpose of stock trading intrigues me especially now. From physics and research, I have a strong matlab and C background and I understand that matlab has some API's that can pull data from yahoo for free. I looked into bloomberg's api but it costs $1800 per month, and I am not investing on that order of magnitude for it to be worth it... yet. Even if I don't take a job in quantitative finance, I think the skills are things that I would want to apply to my own finances and investing strategies.

So I suppose my question is this, and I am not sure if this is more career related or it belongs in a different forum (if it belongs somewhere else, please let me know!): Is there anything I can do on the order of magnitude of myself and my knowledge to learn how to use a computer to help me trade or research stocks? Would these skills be smiled upon or even useful if I decided I wanted to pursue quantitative finance down the road? Are these kinds of tinkerings in matlab and the datafeed toolbox worth my time? If you were me, what would you do?

Thank you for reading my post. Cheers

 

[SadKillarrious]

I think you should focus on successfully completing your PhD. From my inclination though, it appears you are actually very interested in wanting to become a quant because of the $$$$ and this isn't just a side gig. Therefore, I hope your heart is in wanting to get a PhD and don't just view it as a stepping stone because it'll be a long 5 years hoping to get into a industry with no guarantee.

 

[Totally]

"The reason I am doing the PhD as of now is because I love physics and am going to enjoy research for the next 5ish years on something I consider fascinating, not because I want to get a better foothold into quant jobs." How much more clear does it get?

But that being said, I learned to invest at a young age. All I'm asking is where I should look for tools to expand my investing horizons in ways that take into account what I've learned so far and my quantitative abilities. That's a fair question...

I personally believe that given America's course, the only way going forward to be able to afford to retire at a realistic age as an average person will be through the added income of investments. Something that many of my generation are afraid of. And using my quantitative knowledge, even if just personally for my own gain, would be cool to me.

So why the negative words towards me?

 

[tfors]

Data should be available for much less than $1800 or free, even from yahoo as you say (although yahoo gives you sparse data afaik). And then you could start mining it.

 

[SadKillarrious]

You asked "If you were me, what would you do?" And you said "Would these skills be smiled upon or even useful if I decided I wanted to pursue quantitative finance down the road?" So clearly, you do want to get a better foothold into quant jobs, and that is perfectly ok. I don't see what I said as "negative" words but REAL words.

 

[Totally]

Deleted the wall of text for something clearer, more concise, better.

I don't "want to get a better foothold" right now. What I want is the skills and knowledge so that IF I "want to get a better foothold in the future", I can. In the meantime, these skills are for my own benefit. And if I never want that better foothold, I still plan on using them for the rest of my life.

Are there any better cheap sources other than yahoo to get data? I'm enjoying making matlab functions.

 

[A modest quant]

Hey Totally,

Do you think financial markets can be governed by the laws in physics?

 

[Totally]

A modest quant, it is something that I've pondered briefly. I don't know about completely governed. But sometimes I think of a financial market like a star with its gravitational force inward and nuclear fusion pressure out. Not sure if that is a right way of thinking about it - but that's an analogy I think of.

Why do you ask?

 

[A modest quant]

A modest quant, it is something that I've pondered briefly. I don't know about completely governed. But sometimes I think of a financial market like a star with its gravitational force inward and nuclear fusion pressure out. Not sure if that is a right way of thinking about it - but that's an analogy I think of.

Why do you ask?

For obvious reasons, you're a physicist and so you will view the financial market as one physical market where buyers and sellers must follow some physical laws when making prices. Are there other ways? I think not.

 

[tfors]

Deleted the wall of text for something clearer, more concise, better.

I don't "want to get a better foothold" right now. What I want is the skills and knowledge so that IF I "want to get a better foothold in the future", I can. In the meantime, these skills are for my own benefit. And if I never want that better foothold, I still plan on using them for the rest of my life.

Are there any better cheap sources other than yahoo to get data? I'm enjoying making matlab functions.

Just came accross quantopian.com , maybe this is close to what you are looking for, keep us updated if you do give it a try.

 

[Totally]

Thanks tfors, I actually stumbled across that yesterday.

 

[bigbadwolf]

I personally believe that given America's course, the only way going forward to be able to afford to retire at a realistic age as an average person will be through the added income of investments.

USA's future will probably be along the lines sketched in the following blog post:

http://odinsravensnest.blogspot.com/2014_06_01_archive.html

The decline and fall of the American dollar had hugely disruptive consequences, domestic and foreign. Domestically, life and social and political organisation were drastically simplified. Accumulating bigger piles of almost worthless currency and admiring those who had the highest heaps soon lost it's attraction. The important thing became finding enough food to survive a little longer. Tens of millions of jobs remote from food production lost their point. Producing, protecting and preying upon those who produced food became the new or newly obvious, basis of the economy and society. There were far more mouths than could be fed. Many had to die. There was no immediate or smooth transition. Naturally, the politicians and parasites didn't curl up and die. They tried to maintain their grip and their privileges, but with diminishing success. As the productive base of the pyramid shrank, the number and height of the layers above it that could be sustained had to shrink commensurately.The three hundred million or so guns in the hands of ordinary Americans did not remain unused, nor did the heavier weapons available to those who wished to continue ruling them. By the time the flows of blood declined to trickles, the political culture of what remained of the country had also been simplified. It was no longer possible to maintain large classes of unproductive propagandists, academics, lawyers, jail bait tax consumers and bureaucrats to administer them and to tax and redistribute food and goods from the productive to these and to the political class, nor had such people any political influence. The whole banking and financial, media and advertising, legal and judicial, education and taxation systems had imploded along with the dollar. There was no general replacement for the dollar, just ad-hoc trade in goods using whatever 'near money', such as food or ammunition or booze or silver or scrip issued by local businesses or would-be-authorities was acceptable to those attempting to do business. Local gangs of crooks, politicians and gunmen were now in charge of areas where there was enough of a productive base to sustain a much simpler and arbitrary system of governance. They squabbled between themselves and with their neighbours, but lacked the resources for large scale or long range conflict. Washington was accorded honorific status as a sort of first among equals by the variety of Governorships, Mayoralties, Peoples Democratic Republics or warbands in loose and shifting alliances that tenuously controlled the remaining productive populations and resources, but the notion that they would actually obey or pay more than could be extorted from them by the rather small forces at the command of the self proclaimed President and Commander in Chief and his Congress of cronies, was quite risible.

 

[JesseLevermore]

First I would like to ask why these posts haven't been consolidated into a single thread.

Second in response to wolf I would find it hard to believe that China could ever have the creativity to actually be a world power. I mean really, their government just incubates the society from outside influence and steals business ideas through hacking. That doesn't signal a bright future. (Also look at mathematics, how many Zhang's theorems do you see? Hard work? Yes. Innovation? I have not seen any.)

Russia in my opinion is a little more likely but there is such a lack of cohesion in the Rodina that they seem unlikely to unify. I mean look at Russian history, these people just do not trust their leaders.

Why America will always be center of capitalism? From the best line in Killing Them Softly, because America is a business. People don't come here to make friends and meet people. They come here to make money and on that front we are unified. We will always be the best at making money because anyone who really wants to make money has ended up here. It's the same reason people will always say Harvard is great. It was great, people made it great, nothing inherent, just a self perpetuating reality.

 

[nightkid]

Second in response to wolf I would find it hard to believe that China could ever have the creativity to actually be a world power. I mean really, their government just incubates the society from outside influence and steals business ideas through hacking. That doesn't signal a bright future. (Also look at mathematics, how many Zhang's theorems do you see? Hard work? Yes. Innovation? I have not seen any.)

"Ever" is a mighty long time horizon... With "Ever", you are not saying it's the government, but instead there is some inherent flaw with Chinese people that prohibits any form of creative thinking, now or in the future. This certainly won't sit well with 20% of the population of the world!

After all, Chinese people did invent gunpowder, paper, compass, printing, etc...

I do agree that the Chinese government poses a limiting factor due to their incessant need to put a party official in everything, from businesses to universities. But at least the government wanted China to become an innovation powerhouse, and are willing to invest in education. They also have the backdrop of learning from the mistakes of other countries' innovations, and are willing to adapt to new technologies in their quest to strengthen their own R&D capabilities/capacity.

Personally I think Chinese people are quite creative, especially in the area of chemistry. Just look at all the fake stuffs (eggs, wine, milk). It would serve the government well to channel that creativity towards something grander and less murderous...

 

[themarketprofessor]

First I would like to ask why these posts haven't been consolidated into a single thread.

Second in response to wolf I would find it hard to believe that China could ever have the creativity to actually be a world power. I mean really, their government just incubates the society from outside influence and steals business ideas through hacking. That doesn't signal a bright future. (Also look at mathematics, how many Zhang's theorems do you see? Hard work? Yes. Innovation? I have not seen any.)

Russia in my opinion is a little more likely but there is such a lack of cohesion in the Rodina that they seem unlikely to unify. I mean look at Russian history, these people just do not trust their leaders.

Why America will always be center of capitalism? From the best line in Killing Them Softly, because America is a business. People don't come here to make friends and meet people. They come here to make money and on that front we are unified. We will always be the best at making money because anyone who really wants to make money has ended up here. It's the same reason people will always say Harvard is great. It was great, people made it great, nothing inherent, just a self perpetuating reality.

Totally agree with Jesse. These are smart people - no questions about that. But this is how they run their economies: The American run theirs as cowboys (see the Bull statue in New York!). The Russian the mafia. The Chinese the thiefs. The English the conservatives. The Indians the bullies. Where is the future of the world economy?

 

[TraderJoe]

There is uniform consensus among IMF / World Bank / Goldman Sachs / PWC, and other economic analysts that Chinese economy will be larger than USA economy in PPP temrs within SIX years and in Market Exchange Rate terms within TEN years.
Now the really suprising news: By 2050, the Chinese economy will be TWICE the size of the USA economy and the Indian economy will be larger than the USA economy. It may seem shocking to many, but it is nearly inevitable that this is going to happen.

 

[JesseLevermore]

I'm sorry but nearly inevitable? I bet assuming current growth rates we could predict that the Liberian economy will become larger than America's in the next 20 years(http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG). The fact is economic growth is logarithmic. I don't have faith in those numbers at all.

China is not a mature economy. I'm so sick of seeing this that I will make it a point to argue against it with you. A mature economy has mature economic participants. Members who are no longer willing to just blindly follow the growth promoters who are looking to force a country into becoming the number one economy. I expect to see an increased savings rate among the chinese middle class that leads to an inevitable collapse of growth.

It is technology that drives an economy forward and an increase in the number of foreign/domestic consumers. We allow the chinese market to make markets in certain segments because of cost. They will see costs increase, we will take on more of their inevitable decline in labor productivity.

Unsustainable growth is unsustainable.

 

[bigbadwolf]

There is uniform consensus among IMF / World Bank / Goldman Sachs / PWC, and other economic analysts that Chinese economy will be larger than USA economy in PPP temrs within SIX years and in Market Exchange Rate terms within TEN years.
Now the really suprising news: By 2050, the Chinese economy will be TWICE the size of the USA economy and the Indian economy will be larger than the USA economy. It may seem shocking to many, but it is nearly inevitable that this is going to happen.

It's not possible. These analysts really are in the dark. All these economics (US, China, and India) are going to face insoluble problems and savage contractions in real terms. We're already at the plateau of peak oil. And peak everything else.

The Archdruid has a good blog post on the scenario for the US:

http://thearchdruidreport.blogspot.com/2014/07/dark-age-america-climate.html

 

[TraderJoe]

You make a lot of points which may or may not be valid.
However, I am a naive person.
On one hand, I see hard data and detailed analysis presented by senior economists at IMF / World Bank / Goldman Sachs / PWC, all o whom have PhDs from top schools.
On the other hand, I see some points by an anonymous person on the Internet who may or may not have a PhD in Economics.
I am inclined to believe the economists at institutions like IMF / Worl Bank / Goldman Sachs / PWC.

 

[bigbadwolf]

You make a lot of points which may or may not be valid.
However, I am a naive person.
On one hand, I see hard data and detailed analysis presented by senior economists at IMF / World Bank / Goldman Sachs / PWC, all o whom have PhDs from top schools.
On the other hand, I see some points by an anonymous person on the Internet who may or may not have a PhD in Economics.
I am inclined to believe the economists at institutions like IMF / Worl Bank / Goldman Sachs / PWC.

You're quite right. They have PhDs from Harvard, Princeton, Oxford. They wear expensive suits. They speak with grave voices. They change their razor blade every day. Stick with them; they know what they're talking about.