Thursday, December 19, 2019

What am I trying to learn before end-2019

Image result for dummies guide quantitative finance

I thought this would be the right time to share some of the personal projects that I have. I have written some time ago that I will be spending a year to assess the feasibility of getting a PhD in a topic related to quantitative investing. Assessing the feasibility does not mean actually doing a PhD but to just see whether this is a project that I can succeed in doing in the future.

a) Brief tour of Quantitative Finance 

I tried to begin by reading a Dummies guide to Quantitative Finance. I figured out that this cannot really hurt as I can adapt some of the niftier concepts into my ERM programme.

Turns out that the Dummies guide is hardly for dummies and I really struggled to make sense of the subject.

A lot of arcane formulas do not come with proofs and I find myself trying to recall the eigenvectors and eigenvalues I picked up during JC and my engineering days. There are also models I am unfamiliar with like GARCH which can be potentially useful to investors if they are bloody minded enough to pick it up. It is also quite damaging to figure out that I can merely parrot an equation like the pdf of the normal distribution curve, but have no idea how mathematicians even arrive at that thing.

The best I could do right now is to gain a qualitative grasp of what I read.

So far, I have at least one motivation and super-audacious goal : Use principle component analysis (PCA) to figure out what are the best factors that produce superior equity returns with a data-set of local stocks.

I know that if I succeed in doing this, I can at least strengthen my ERM course with new insights or get started on a thesis. I cannot imagine that Bloomberg does not already do this.

b) Studies on Memory

To keep my morale up, I can't just keep doing stuff that stumps me along the way. It is time to really understand how folks memorize materials for study. In all my three degrees including even Law, there is no real need for rote learning. So I started to investigate how medical students remember all their materials. I can now summarize it into three separate processes :

  • Using ANKI to produce software based flashcards. 
  • Using MNEMONICS like S.M.A.R.T goals.
  • Method of Loci - I decided to zoom into this because this is super-cool and allows amazing feats of memory.
In the medium term, I want to memorize the components of the STI using a Method of Loci. 

This is a vital skill missing from our education system.

c) Speed Reading

I read fairly fast compared other folks due to sheer practice so I do read clusters of words rather than individual words.  Eliminating sub-vocalization makes me read faster but pleasure is rapidly being lost once I do this.   

In February 2020, my Economist subscription will lapse and I can finally clear my 60+ books on my KIV list. If I can can finish the economics non-fiction books on my shelves, it might well be a PHD on it's own.

d) Starting a Bullet Journal

If I am going to pick up all these micro-skills, might as well go full retard and start Bullet Journalling as well. 

While I am quite conscientious on work or money related matters, I am screwing up my social life, missing out gatherings and neglecting my RPG hobby. This is increasingly illogical because, in my financial freedom, I realise that I am being tied even further to making more money and building up my training business. Success is addictive !

To maintain my hobbies, the folks I play with should be entertaining but I also need to make time so maybe a Bullet journal will help. 

I will be back in the DMs seat this weekend.


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