On Trading and Aptitude

I know there are many younger readers of this letter. I’m not a quant. I took Calculus BC in HS and one stats class in college (although I do want to take more math online — I’m not advocating ignorance). Many of you are very strong in math. There’s a perception that options are about graduate degree stochastic calculus and differential equations. There are research-oriented jobs for which this is true. These jobs require raw mental horsepower and lots of training to tackle technical problems.

On the trading side, don’t get discouraged by academic notation in option papers. Here reasoning and numeracy are the pen and hammer. The tools of the trade. I should add for college students looking to get into trading coding is now table stakes. You need to have something to give in exchange for learning. The business is harder than ever, fetching lunch is not enough. (I know what you are thinking. Every generation in trading always thinks “if I was just born 10 years earlier it would have been so much easier to rake in the bucks”. It’s as stupid as a 300 lb lineman who wishes he could have come up in a time when linemen only weighed 250. He’s committing a time travel fallacy where he gets to go to the past with knowledge of recent innovations in diet, drugs, and exercise). Continuing on. The ability to code is also self-reliance. My own ability is very limited and I’m sure a junior will look at me the way I used to look at older traders who struggled with Excel. Circle of life.

Perhaps more so than the pure quant roles, in trading there’s a lot of room for grit. The analogy is as simple as the fact that most poker players are not quants, but there’s no doubting their discipline, endurance, ability to focus, number-sense, and logic skills. Your liberal arts (and no economics and business degrees are not science) degree is not a life sentence in ops.

(To be clear, this is not an affront to ops…my wife went that way. In fact, there is a whole conversation to be had about why a career in ops can be a more lucrative route. But it’s a parallel route and if a person wants to trade and take risk, anything else will feel like they failed even if objective standards might say otherwise).

On the other hand, tying this all back to the Parable of the Talents essay — trading is not for everyone. It’s not even for many. You can do anything, except for what you can’t do.

Music Appreciation Channels

My favorite YouTube channels are about music appreciation

1. Ryan and George are Lost in Vegas. (Link)

These 2 guys are R&B and hip-hop enthusiasts who have discovered rock and metal. Their followers submit songs for them to do reaction videos and they have amassed a million followers who tune in to see their commentary. It’s like a play-by-play for songs you know. Despite not being musicians themselves, you only need to see a few videos to realize they have innate musicality and perceptive ears. But the best part of these videos is how enthusiastic and endearing they are. It’s easy to see why they have become popular enough to quit their day jobs. I’ve been watching them for a couple of years and it’s cool to watch their palette widen and see what songs they will give their highest honor…”playlist!”

While I dig so many of their videos, including their breakdowns of Rush, Rage Against the Machine, Van Halen, and Metallica songs their’s nothing like watching them lose their minds over a song that you also love. They do plenty of hip-hop and even country songs.

Here are some of my favorites:

  • Alice in Chains: Rooster (Link)
  • Chris Stapleton: Tennessee Whiskey (Link)
  • Black Sabbath: War Pigs (Link)

And here’s a more recent one with their higher production backdrop…and is a great way to wade into the brilliance of Tool’s recent album which I’ve raved about before.:

  • Tool: Pneuma (Link)

2. Rick Beato’s Everything Music channel (Link)

Rick is a producer and multi-instrumentalist who represents the opposite end of Ryan and George’s amateur appreciation. Rick will dive into music theory and teach you what makes certain songs great. Everything from ear training to detailed top 20 lists. If you are a big music fan, music nerd, or musician this channel could keep you busy enough to displace Netflix. His home studio is ridiculous and he can sidestep getting blocked by music labels since he can easily just demonstrate the music being discussed on his own.

A great place to start:  “What Makes This Song Great?” series (Link)

Here’s a look at his other playlists. His son Dylan has perfect pitch and gets his own playlist full of his own party tricks.