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The Future of FE Without Leverage

Jon Steiner

Joined
10/19/08
Messages
2
Points
11
Hi All,

I'm a 37 year old man who is considering getting into FE after years of being a software developer (on the Windows side of things, but that's irrelevant).

What I want to know is your thoughts about this: It seems most trading strategies depend on having highly leveraged trading strategies (e.g. at about $30-$40 borrowed for every dollar of internal funds invested.)

Now that this leverage will disappear, does Financial Engineering have the payoff that it will have had over the last few years? Or is the goal of becoming well-to-do by being a 'quant' as silly as becoming well-to-do by becoming a lawyer from a non-Ivy league school is in 2008 (very bad chances (see "Hard Case: Job Market Wanes for U.S. Lawyers") ?

My assumption, of course, is that most trading strategies generating outsized returns depend on leverage. Are there other trading strategies that deliver out-sized profits that do not?

--Jon
 
I don't get it...

Are you saying that it is up to me to find a strategy? I agree with that, but I also agree that I'm no Einstein, and working like a dog for less and less money strikes me as stupid.
 
Jon Steiner said:
Are you saying that it is up to me to find a strategy? I agree with that, but I also agree that I'm no Einstein, and working like a dog for less and less money strikes me as stupid.
Click to expand...

You've already answered your own questions in your two posts; your query, I suspect, is rhetorical. In short, if you're not already a math whiz kid, stay away from quant work: it's going to be intensely competitive, with declining opportunities and declining salaries and bonuses.

Postscript: Many (if not most) Americans are working like dogs for less and less money: the real inflation rate (not the bogus official figures) is now at 13.2%, and was 8% last year. Most people have had either constant wages or slight increases: real purchasing power is of course down.
 
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