market-depth^elite domains esp. algoTrading

I used to dismiss “commodity” skills like market data, risk system, J2EE… I used to prefer high-end specializations like algo-trading, quant-dev, derivative pricers.

As I get older, it makes sense to prefer market depth rather than “elite”(high-end niche) domains. A job market with depth (eg market-data) offers a large number of positions. The typical salary of top 10% vs the median are not very different — small gaps. In contrast, the elite domains feature bigger gaps. As I grow older, I may need to reconsider the specialist vs generalist-manager choices.

Reminders about this preference (See also the spreadsheet):

1. stagnation in my orgradient
2. may or may not use my specialist skills in math, concurrency, algorithms, or SQL …
3. robust demand
4. low churn — a critical criteria whenever I mention “market depth”. I don’t like the market depth of javascript and web java.
5. salary probabilities(distro): mgr^NBA#marketDepth etc

–case study: Algo trading domain

The skillset overlap between HFT vs other algo systems (sell-side, OTC, RFQ, automated pricing/execution..) is questionable. So is “accumulation” across the boundary.  There seems to be a formidable “dragon gate” — 鲤鱼跳龙门.

Within c++ based HFT, accumulation is conceivable. Job pool is so small that I worry about market depth. My friend Shanyou agreed that most of the technical requirement is latency. C/C++ latency techniques are different from java.

Outside HFT, the level of sophistication and latency-sensitivity varies. Given the vague definition, there are many (mostly java) jobs related to algo trading i.e. better market depth. Demand is more robust. Less elitist.

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## realistic 2-10Y career planning guidelines

Background: not easy to have a solid plan that survives more than 3Y. Instead of a detailed plan, I will try to manage using a few guidelines.

• –top 5 guidelines:
• Singapore — much fewer choices. Better consider market-depth^elite domain
• trySomethingNew — may/not be justifiable
  • stagnation — could be the norm
  • engaging — keep yourself engaged, challenged, learning, despite the stagnation
• Expertise accu or sustained focus — holy grail
• family time — how2get more family time #a top3 priority4Sg job
• ——– secondary:
• interviews — Let’s accept : extremely important to me but much harder in Singapore. Even in the U.S. I may need to cut down.
• distractions — Let’s accept
• appreciation/appraisal(esp. by manager) — Let’s accept: may not be easy to get
• Peer pressures — Let’s accept.
• Entry-barrier — could be too high for me in the popular domains like algo trading
• non-lead dev role — Let’s embrace. Don’t feel you must move out or move up. Hands-on coding is gr8 for me. Feel good about it
• Shrinking Choices — many employers implicitly prefer younger programmers
• Entry-barrier — could be too low for some young guys — the popular domains will have many young guys breaking in
• Churn — Avoid

long term planning can be demoralizing

My father often tells me I plan ahead too much…

Q: where will I be, what job will I have 5 years from now?

Such questions can be demoralizing and sometimes can dampen a precious spirit of optimism. I sometimes perform better by focusing on here and now.

I think the reality may be quite bland and uninspiring — same job, with declining income, not much “offensive” to mount …

5 reservations about big data(quant)domains for 10Y direction

1. fads — vaguely I feel these are fads.
2. salary — (Compare to financial IT) absolute profit created by data science is small but headcount is high ==> most practitioners are not well-paid. Only buy-side data science stands out
3. volatile — I see data science too volatile and churning, like javascript, GUI and c#.
4. shrink — I see traditional derivative-pricing domain shrinking.
5. entry barrier — quant domain requires huge investment but may not reward me financially
6. value — I am suspicious of the social value they claim to create.

meaningful endeavor(Now)towards20Y-career build`#dnlg;zbs;IV

Q: what efforts go towards 20Y-career build`

This question is slightly vague, but it’s subtly different from

Q2: what efforts create social value?
Q3: what efforts are cumulative?

I feel the key question in this article is about building a deep and broad “foundation”, upon which we can start to plan (possible) social value, retirement planning, parenting/family building etc.

• 😦 teaching and research —- Somehow I tend to feel research creates long-term value but I suspect most research efforts are not valuable!
• 😦 open-source software —- I tend to feel OSS projects create social value, but most of them are not successful and have no lasting influence
• 😦 Deepening your domain knowledge such as (German’s) security lending —- It does increase your value-add to some employers and help you move up to management, but I don’t call it “foundation”.
  • MSFM and other formal training —- I feel this is less effective, more ivory-tower, but it does build a firm theoretical foundation.
• zbs such as instrumentation skills? Yes zbs helps your KPI, and also indirectly helps you with interviews. It’s portable skill, unlike local system knowledge. Can the value last 20Y? Depends on the technology churn. c++ and java are safer.
• IV muscle building? My favorite career building effort. 20Y? 5Y yes.
• fitness and health
• English/Chinese writing and vocab

(IncInc)most effective 10Y direction to INCrease INCome

Reality! We better embrace reality, not ignore it.

• Quant? no. Get Real
• new skills like py, hadoop, data science? low chance of increasing my income

• some specialist role, perhaps
  • risk/pricing analytics?
  • low-latency algo trading in c++/java? unlikely … Get Real
• hands-on architect (different from specialist)
• (perhaps maintenance mode) app owner
  • must be a high value application

 

a profession you ENJOY with good income+barrier

Update — Enjoyment is often short-lived and affected by too many minor factors like

• respect by mgr #bonus
• “strategic” learning #Barclays
• commute

Instead of Enjoyment, I’d prefer “engagement”…

——–

Background — discussion with an older fellow developer about helping our high-school kids select a major.

Example — Look at Aunt Gennifer. She changed her profession around age 40 to find a less boring job, and paying more.

Example — grandpa has an ever-green interest in his research field, but most researchers in this field are not well-paid (it’s the least commercial field of research). In terms of income, I think grandpa’s medical and pension benefits are in the the top 1%.

Example — me. I entered trading-engine-dev circa 2007.

• It pays well above the average professional salary across all professions. (I was told U.S. family doctors earn about 150k only.)
• Market depth is excellent — look at my post on NBA salary.
• The constant pressure to upgrade and learn is perfectly acceptable to me. In fact, I seek opportunities to maintain my learning pace
• I don’t find it tiring or boring. For a few years before 2007, I told myself “I don’t want to remain a developer for life” but had a U-turn.

For most people, it’s hard to find a profession that’s not boring, not too tiring, and pays well, a field you could keep plowing till retirement, if you ever retire.

In fact, such a field is likely to be /oversubscribed/ — too many hopeful new entrants but few would get in and fewer would survive 😦

Example — Lianzhong’s daughter Borong loves writing, but she realized it wouldn’t be an easy way to make a living. Similarly, a large number of individuals have a meaningful and rewarding “hobby” but can’t make a decent income from it

• tweaking with computers and gadgets
• visual arts # including photography
• literary arts
• performing arts #including music
• sports, games #including board and electronic
• cooking

meaningful endeavor(Now)4family: IV^zbs^gym..

meaningful endeavor Now: algo^zbs^…

In the quiet hours, inevitably I would get my share of self-doubt about the value of my endeavors. See also what efforts go towards 20Y-career building

At other times, I would feel the impacts (of my effort today) on the people who depend on me — grandparents, kids, wife. There’s a lot I can do to make their lives safer, richer, easier, … For example, the interview-preparation effort looks short-term and less meaningful than zbs, but actually has more impact on family well-being such as education, health-care, housing and life-chances. Interviews build my confidence and capacity to provide for them.

Looking at my peers … I feel their personal endeavors are not much better than mine:

• move up to leadership positions. I think that’s a good direction if you an move up. I gave up long ago. So I see myself almost like a specialist consultant for hire
• personal (property) investments
• kids grades and top schools

		accumulation	mental fitness, anti-aging	career after 65 (RnD/teach)	family well-being		social value?
		can be good. depends on churn	good	minimal	HUGE value		minimal	IV: QQ/BP
		good	excellent	none	HUGE value		none	IV: algo practice/ECT
		good	excellent	N.A.	good		none	… compare to: gym
		can be good. depends on churn	good	possible	HUGE due to PKI but doesn’t help IV directly		minimal	zbs #+GTD, instrumentation
		churn	ask HuKun	too volatile			none	data science, machine learning
		good	some	none	good due to IV		none	build dnlg(+quant)
		some	minimal	none	questionable		can help kids; can’t teach	personal investment analysis
		NA	minimal	none	HUGE impact		none	… compare: family expense management
		some	some	possible	none		high	En/Ch learning
			good	minimal	none		churn! Get Real no bandwidth!	contribute to OSS??

“spread%%nlg” as a column? trivial.

[17] 5 thrusts/directions over next5-10Y]U.S.

1) buy 1st home as soon as financially feasible. Before that consider REITs.

2) shift more focus to academic parenting

3) start PhD if everything works out. Will pave the way to a research/teaching career till age 75

4) consider some Chinese-language-teaching business for wife

5) may need to change gear to a relaxed job, but maintain competitiveness on job market (I didn’t say “on the job”)

I feel my health and job market competitiveness (#5) are the foundation.

##criteria: domains2specialize over30Y

See also post on top 5 expertise I could teach.

In the US job market, people often ask “What do you specialize in?”. I think most non-managers in this industry, esp. the successful ones, do specialize in something. Whether you like it or not, you are often perceived that way.

Clearly, many professionals are jack of many trades (or a jack of few trades), and don’t have any real expertise, depth or insight. Depending on your view, this may not be a problem for them.

Like property evaluation, I have a list of criteria:

1. theoretical complexity — so most peers can’t master it. I get lower stress. For example, Threading, statistics, pricing models, algorithms, data science? …
2. market depth (entry barrier) — eg: quant is too hard to get into and very few jobs in the mid-range or low-end
3. opportunities in research/teaching, for my later years. Relatively few choices.
4. aptitude — (aka personal advantage) easier to add value and receive appreciation and recognition.
5. Something I believe in or care about, such as personal investment, or health. Self-knowledge: If it has commercial value I will care about it.
6. ———– Rest are secondary —————-
7. pathway to self-employment
8. (obvious) accumulation and low churn — Look at grandpa
9. premium on job market — low priority in my later career
10. Something related to early childhood education

Some specific domains (See the spreadsheet for more details):

• concurrency in java/c++
• raw market data processing in c++
• risk mgmt + derivative valuation