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Friday, March 22, 2019

Friday Feature Book Review: The Quants by Scott Patterson (Math Algo Geniuses) ザ・クオンツ: スコット・パタースン 世界経済を破壊した天才たち (数学アルゴ天才)

I first thought this book would be dry, but I was very wrong. It reads like a mystery thriller in many ways. It is a great quantitative finance backgrounder for anybody wanting to know how hedge funds and investment banks moved into the quant space. Citadel, Renaissance, Morgan Stanley's PDT team or the Global Alpha team at Goldman Sachs, are all explained in great detail. You get to know who the key people have been who have driven trading to new levels. They have extraodinary stories and very unique personal backgrounds. Curiously, poker seems to be a theme that is repeated, and ties many of them all together. Clearly numbers are a passion to many of the key quant traders. I do not think this is a learned habit, but comes to a few very naturally. 

The true titans of quant trading are real human beings and they are all driven to succeed in various ways. Edward Thorp is a key early figure who may have started this new computerised money stream. He began by playing poker and counting cards with the mathematical accuracy of odds making. While at MIT he created a poker betting system that worked and later wrote a book on it. It was called "Beat the Dealer" and has inspired many other quants who have a similar dual interest in quant mathematics and poker. Many other inspiring quant backgrounds are also profiled all throughout the book. 

They include Peter Muller, a California boy who created PDT (Process Driven Trading). This was the internal quant hedge fund team within Morgan Stanley that generated billions is P/L for the firm. Cliff Asness worked at Goldman Sachs in the Global Alpha team, but left to start his own quant firm called AQR that now runs over USD180BN in AUM. Boaz Weinstein started as a credit derivatives trader within Deutsche Bank and was blessed with being in the right place at the right time. Although he always was focused on finance and had an internship even in high school at age 17. He started young and created Saba Capital after he left Deutsche Bank. It now runs over USD1BN in AUM.

Jim Simons, the code cracker from the US government left academia and started his own firm Renaissance Technologies with a very unique style with over USD100BN in AUM. Unlike many others, he prefers PhD staffers with NO financial background. Why teach great minds to "unlearn" any financial viewpoint, just start them fresh with an open mind. Ken Griffin, wanted to learn about the stock market as a child at age 12. He traded from his dorm room at Harvard and created Citadel Investment Group straight out of college. This was due to his ability to figure out convertible bond arbitrage and the profits waiting to be made. He now runs over USD26BN in AUM. Clearly there is no shortage of variety in the personalities of these quant entrepreneurs.

There is no secret to making money in the end. The pure quant goal of finding "the truth" or ultimate money making program is like a mirage, and is forever on the horizon. A lot of work is needed to think of, conceptualize, plan, practice and test before going live. It is a never ending process that never ends. Markets themselves change, so no perfect quant program can ever exist. The individuals who started quant trading and those who continue today are driven people. They are outliers and can never be considered ordinary in attitude. They need to find the number. It is in their nature. They do not seem to compromise or just leave it until later, whenever that could be. 


The Top 3 Takeaways from this book that impact any reader are:

1) There is a lot of history to the quant space going back to the 1960s when computers first began to spread widely. There also seems to be a direct link between poker and the motivations of many of the key quant founders. 

2) The value of quant trading brings together the power of a single computer program instead of a dozen trader minds. The leverage of this potential only gets higher with every new more powerful computer. There is no limit to its improvement over time.

3) The capital markets are always driven by innovation, and quant trading has already found its place. From now on, how much of any manual trading will be left in the hands of humans, is the only real unanswered question. The power of trading algos can only refine itself over time.

The main point that needs to be understood is that quant trading has its place, but is imperfect by its very nature. Past behavior may repeat itself, but not always in ways that seem logical. Accepting the imperfect is needed by even the best quants. Perfect storms do exist within financial markets. Black swans are a reality. Never, is a very long time for many, but so called "one in a million events" seem to happen more frequently than may quants can sometimes accept. Two of the biggest worries that the author makes in 2010 are about the future. Would crashes happen quickly, as in within 5 minutes? Well, flash crashes and the end of Knight Ridder proved that would be true. The second was about the ETF liquidity crunch. Is this the next bubble that will pop from leverage? Time will tell. Quant finance has its place and serves its function well most of the time. Overall 99% is a pretty good number to me, even if it is not 100%. I see and fully accept any quant market P/L value, and do not worry about the missing fraction, but then again, I am not a quant. This book was very eye opening and very engaging. Highly recommended!

Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, conferences and anything else with a financial theme. Follow us now for our free weekly updates, just click hereThank you for reading and learning more about how money is made in finance! 

If you are interested in Sales & Trading, Banking or FinTech focused roles in Asia or Japan then click here. Follow TMJ Partners on Linkedin Instagram or TwitterWe are the world's #1 recruiter on Twitter, with over 50,000+ followers globally! click here! 

あなたアジア日本セールストレーディング,
バンキング、フィンテックの役割に興味がある場合は、こちらをクリックしてくださいティエムジェィパートナーズLinkedin Instagram またはTwitterでフォローしてください 世界中のTwitter第1位リクルーター50,000以上のフォロワー既に持っています!クリックしてください

For more Buy-Side and Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team.

Tokyo                                          Tokyo




      Mark  Pink                               Shinichi Nagasawa
Direct + 81 3 3505 3891              Direct + 81 3 3505 3891

Friday, March 15, 2019

Friday Feature Book Review: " Money Mavericks" (Hedge Fund Startup Story) by Lars Kroijer マネー・マーヴェリック―あるヘッジファンド・マネジャーの告白 (ヘッジファンドのスタートアップストーリー): ラース クロイヤー


This is just pure gold. This is a truly awesome hedge fund diary. Without doubt, this is the most honest "true confession" of how to build a hedge fund, ever written. It is a warts and all explanation of the drive, hassle, envy, self doubt, family stress, vindication, satisfaction and acceptance in defeat, of a full roller coaster of emotions that any entrepreneur faces. The book reads as a step by step how to manual of all of the steps needed to set up a hedge fund from scratch in London. It would fit any hedge fund, but also any FinTech style startup so popular now as well.

It explains in extremely clear and professional detail, every aspect of a start to finish hedge fund creation. "If you can do it surely, anybody can" was the one quote that the author's friend said that I will never forget. Not the comment of a winner or a closer in my view, just a critic. That kind of friend would not be on my Christmas card list, ever again.

I only wish there was such a book in existence 15+ years ago, when I first entered the industry, I could have saved a lot of time getting up to speed. Such is life, and that is where we are. At least we have this great "how to" hedge fund manual now for other startups to follow. There may be a few differences in the setup procedures between a hedge fund in Europe vs the US, or even Asia, but they seem minor by comparison. With the amount of offshore legal structures out there, there are more similarities than differences. As someone similar who has built and maintained a business, there were many aspects explained that I also agonized about. I could share business building experiences with many of the events written. 

There was a time window when many with the right abilities at the right time, were lucky enough to succeed quickly. However, as we adapted to the post Lehman crisis world of hedge funds, top tier returns have suffered, so where is the next step forward? Redemptions and inflows have moved on to the larger names, not the new startups of late. Would Ken Griffin be able to start Citadel today? Would George Soros? My bigger question is what qualities will be needed to succeed in the coming wave of hedge funds in this post China peak, and Abenomics world of rising Federal Reserve interest rates? 

Risk appetite from investment banks must go somewhere, and this is a great insight into what any new aspiring hedge fund manager needs to review before winning in the next wave. This is extremely satisfying for the entrepreneur wanting to start a fund in the US, Europe or Asia. All of the lessons are spot on and so clear. I could not put it down due to the very candid, and openly revealed truth in every page. These are the author's insights that are often kept secret for too long, and shared only with a few trusted professionals.

The Top 3 Takeaways from this book that impact any reader are:

1) There is a lot to learn about setting up a hedge fund. Legal details never seem to end. Service providers may seem complicated, but it comes down to a solid foundation at the start. Operational risk is a key part of hedge funds today. 

2) The integrity of hedge fund returns being higher than market average has been suspect recently, but gets more clear when explained by an expert. The grey zone seen by outsiders can be easily removed once you read this book.

3) The capital markets are always driven by many factors. Hedge funds serve a need and have a place. Investors seek out those returns, but these flows go in cycles. Right now large size firms seem to dominate. However, like any market, this could change, and fast.

There is no secret though, luck has to be behind you. If the market is able to get traction and is in "risk on" mode, you can succeed. If not, you just have to wait until the market window is ready, no matter how good you are or how high your personal alpha is. Market prices in London, where this is set, or anywhere else, can actually replace difficult thinking or debate about more difficult questions. The reality of markets leaves it mark on the global economy with any hedge fund set up in London or elsewhere. Highly recommended!

Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, conferences and anything else with a financial theme. Follow us now for our free weekly updates, just click hereThank you for reading and learning more about how money is made in finance! 

If you are interested in Sales & Trading, Banking or FinTech focused roles in Asia or Japan then click here. Follow TMJ Partners on Linkedin Instagram or TwitterWe are the world's #1 recruiter on Twitter, with over 50,000+ followers globally! click here! 

あなたアジア日本セールストレーディング,
バンキング、フィンテックの役割に興味がある場合は、こちらをクリックしてくださいティエムジェィパートナーズLinkedin Instagram またはTwitterでフォローしてください 世界中のTwitter第1位リクルーター50,000以上のフォロワー既に持っています!クリックしてください

For more Buy-Side and Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team.

Tokyo                                          Tokyo




      Mark  Pink                               Shinichi Nagasawa
Direct + 81 3 3505 3891              Direct + 81 3 3505 3891

Friday, March 8, 2019

Friday Feature Book Review: Billion Dollar Whale (1MDB Scandal):Tom Wright & Bradley Hope 10億ドルクジラ (1MDBスキャンダル) トムライト + ブラッドリーホープ

Successful Entrepreneurs and self-made Billionaires often have something to prove. The Billion Dollar Whale is the story of one such person Jho Low. Originally from Penang, Malaysia, the son of a local millionaire, he certainly had something to prove. Due to his father's wealth after a family owned business sale, Jho Low was given a top class boarding school education in Europe, and then Wharton for his MBA. This is where the story really begins. 

There is always another level of wealth once you see it from the inside. Unlike first generation wealth, multiple generation wealth & royalty have widely varying levels of wealth that millionaires will never reach. This gap is what Jho Low discovered at school. The main driver seems to be how can I grow not just better than my father, but well beyond to a Billionaire class? When some people say they are willing to do anything to reach their goals, they sometimes mean exactly that. Moral judgments have no value compared to some goals, and Jho Low shared this attitude. Everything was on the table, even fraud to get that level of wealth.


This is not the book I expected. Jho Low, is a wannabe billionaire. He lacks the core foundation or direct business experience needed to be a real founder. He did not build a business or have an innovative idea for a new product or service. What he lacks though, he makes up for with an unbelievable drive. He has an ability to see the big picture and execute on how greed can override reason. That ability to understand human nature and be laser focused on this weakness, is his genius. He grew up  exposed to billionaire families via his international school education. Many others have done the same, but only he saw the potential to leverage who he knew, in ways that most of us could not fathom. He had a rare ability to both connect the dots and to do so with key people who could close a deal. He could always make those dots line up straight. He fabricated a heist, and then laundered the cash my mastering the weaknesses of the offshore banking system.


By starting with a connection that knew the Prime Minister of Malaysia, he started his plan. By getting the backing of the PM for a new sovereign wealth fund called 1MDB, he began his journey. Goldman Sachs, via Tim Leissner, a top MD in Asia, helped raised further capital via bond sales. The total amount of debt from 1MDB totaled over US$7 Billion in the end! Most of it has since disappeared. Goldman Sachs were overpaid by many multiples in agent fees. This whole fiasco will soon be in US court and a large fine to the US SEC is expected. When the police raided prime minister Najib Razak's home, they found $274 Million worth of items. This included $28 Million in cash, 567 handbags, 423 watches, and 12,000+ pieces of jewelry. This certainly makes it easier to understand how $681 Million sent into the personal account of Malaysia's Prime Minister was not "a mistake" or even a "charity donation" from Saudi Arabia. This unbelievable story is a slow motion train wreck. It is fascinating, but revolting at the same time. Greed & corruption at this level is almost repulsive to the reader.


The Top 3 Takeaways from this book that impact any reader are:

1) There is no limit to ambition, even legal guidelines and moral judgments are self imposed. If you do not have a solid foundation of judgement, you will be lost over time.

2) Even if you have the cash, being accepted as a Billionaire takes time and trust, not just money. Old money never accepts new money quickly, no matter how much.

3) Making short term decisions quickly under stress, that will impact you long-term, are not helpful in life. Any large amount of cash you need to manage, should not be rushed.

Hollywood can seem to paid for if you can afford the price. By bankrolling the "Wolf of Wall Street", Jho Low was able to break into the Hollywood movie seen pretty quickly. However, when you do not ask many basic questions as a producer, directors lose professional respect pretty fast. During the movie, they needed to buy and then crash a US$300K+ Lamborghini Countach in a scene. Jho Low said fine, but no experienced movie producer would allow that. They would force the director to use a replica and save on cost. Jho Low was never that savvy on such details, nor did he care. He showed this pattern in many similar ways. Curiously, when Jordan Belmont attended one of Jho Low's parties, he looked around at the spending and said"this guy stole the cash, nobody who made money would spend it like this" Strange coming from a fraudster who would know. Leonardo DiCaprio, Benicio Del Toro, Alicia Keys, her husband Swizz Beats, Jamie Foxx, Paris Hilton, Miranda Kerr, Britney Spears, Nelly, Ne-Yo and many others all pop into the story. It is amazing how big spending can open up doors in Hollywood.

Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, conferences and anything else with a financial theme. Follow us now for our free weekly updates, just click hereThank you for reading and learning more about how money is made in finance! 

If you are interested in Sales & Trading, Banking or FinTech focused roles in Asia or Japan then click here. Follow TMJ Partners on Linkedin Instagram or TwitterWe are the world's #1 recruiter on Twitter, with over 50,000+ followers globally! click here! 

あなたアジア日本セールストレーディング,
バンキング、フィンテックの役割に興味がある場合は、こちらをクリックしてくださいティエムジェィパートナーズLinkedin Instagram またはTwitterでフォローしてください 世界中のTwitter第1位リクルーター50,000以上のフォロワー既に持っています!クリックしてください

For more Buy-Side and Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team.

Tokyo                                          Tokyo




      Mark  Pink                               Shinichi Nagasawa
Direct + 81 3 3505 3891              Direct + 81 3 3505 3891

Friday, March 1, 2019

Friday Feature Book Review: “Traders, Guns and Money” Satyajit Das トレーダー、デリバティブ、そして金 : サティアジット・ダス

This is the real inside story on markets. There is no holding back on any delicious details in this book. You really learn a lot about how finance really works internally. It reads like a whistle blower diary of what happens inside a securities firm. I never strangely thought that an "insider" from any top tier investment bank would ever write such a book. It is what capital markets "are really like" and even educates those curious about them, if not familiar. 

This is a very eye opening account of a real derivatives professional who really understands a wide range of markets, and the true ways an investment bank functions within them. He has a realistic view of the financial world, and does not make any claim that it is perfect. Quite the opposite, in fact. It almost reads like secret notes any newcomer to finance should have from an older brother already there. That was the feeling I had when reading it anyway.

He really just tells the reader "how it really is" inside a global investment bank, and the people he worked with. The politics, the trade size realities, the profits possible, and who would push to make each trade happen, are all explained well. Off the top of my head, it is the kind of insight that anybody considering a career in finance after MBA school should use as a filter. 


In many ways, it also captures a moment in time for derivatives in general. This is before the positive pricing benefits of derivatives were totally tarnished by CDOs, and then became weapons of mass destruction in the post Lehman shock era. 

If you are a curious person and have never considered working in a global bank, but wanted to be a "fly on the wall" in order to know what could be really going on, this is for you. This book is a great first exposure and highly recommended with extremely well written detail. Ultimately, all financial products are a just a series of cashflows. The complication of any of them can be broken down into simple slices. There are no exceptions. 

Many within finance, especially those who know parts but not all aspects, try and give the impression that they are very difficult to understand. This is a weak excuse by some to cover up their own lack of clear understanding. It is a kind of offensive yet defensive style, that keeps many new to the area, from learning much of these sometime complex products that are becoming a growing part of business life.


The Top 3 Takeaways from this book that impact any reader are:

1) There is a lot to learn about derivatives and how they are created, sold, and finally booked with clients. It may seem complicated, but each part, when seen alone is very understandable.

2) The integrity of derivatives has been suspect, but gets more clear when explained by an expert. The grey zone seen by outsiders can be easily removed.

3) The capital markets are always driven by many factors. Politics and personal benefits drive a lot of action. The IQ of many in global investment banks can often be overshadowed by the EQ of others taking advantage of another person's P/L.

Many people within investment banking need to be part of any economy, but morals and values certainly have a place. Markets do not always justify their prices. Market prices can actually replace difficult thinking or debate about more difficult questions. The reality of markets leaves it mark on the global economy especially with derivative products. Highly recommended!

Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, conferences and anything else with a financial theme. Follow us now for our free weekly updates, just click hereThank you for reading and learning more about how money is made in finance! 

If you are interested in Sales & Trading, Banking or FinTech focused roles in Asia or Japan then click here. Follow TMJ Partners on Linkedin Instagram or TwitterWe are the world's #1 recruiter on Twitter, with over 50,000+ followers globally! click here! 

あなたアジア日本セールストレーディング,
バンキング、フィンテックの役割に興味がある場合は、こちらをクリックしてくださいティエムジェィパートナーズLinkedin Instagram またはTwitterでフォローしてください 世界中のTwitter第1位リクルーター50,000以上のフォロワー既に持っています!クリックしてください

For more Buy-Side and Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team.

Tokyo                                          Tokyo




      Mark  Pink                               Shinichi Nagasawa
Direct + 81 3 3505 3891              Direct + 81 3 3505 3891

Friday, February 22, 2019

Friday Feature Book Review: Impatient Optimist Bill Gates In His Own Words by Lisa Rogak せっかちな楽観主義 ビル・ビーゲート: ライザ ロガック

This book opened my eyes to the true core drive of any great entrepreneur. I admire anyone like Bill Gates, who felt he had to leave Harvard University, because he saw that time would not wait for his software vision idea to be executed. We now know that it worked out, but what kind of person was Bill Gates in his youth?  If he told you during those early days would you have believed him? Did he make a good case? or was it something that had to be seen in order to really be believed.

I have no negative image of Microsoft being too large a monopoly in the business PC world, and never did. Unlike some of my Apple and Mac friends I never saw the two software rivals in the same way as "the Empire" and "the Rebels" like in the Star Wars films. I leave that pointless fierce rivalry to others. I just want to learn what was in Bill Gate's head, what was in common with me, and absorb any key new ideas or traits about him. There are many listed.

Any reader of this book really wants to know if they could have performed the same way, if the timing and opportunity were equal. However, you learn that nobody is equal to Bill Gates, in that he saw a vision that few others did in his time. His mind was already on a path towards a focus that few others really had. It is clear to read from his own words that he did not start on a visionary path while at Harvard University, but much earlier. 

His vision of the world of technology was established in high school long before university. His mind just first blossomed in Harvard. I no longer can listen to TV reports on the debate over will Bill Gates come back to the firm he founded. He has evolved way beyond a single business like Microsoft. His drive is no longer about profits, but goals for humanity and the future health of humans world-wide.

I seriously doubt that any commentator can really think that Bill Gates would even want to go backand help Microsoft make its numbers again. That was part 1 of his career. He is now deeply involved with part 2. He is making numbers count with the health of humanity. If his own drive towards the needs of the planet and human health were not so crystal clear, billionaires would not follow in his lead and support him with their personally earned large funds

Players at the top can often read and sense the moves of other similar players, including strengths weaknesses. You read about observations here, and about how they get applied to software or beyond. Timing aside, you learn about one thing that comes out in very black and white. He worked hard or maybe it is better to say, when he coded or learned about coded software he was always hard at work

You never get the sense that money itself ever drove him. His father already gave him all the basics of middle class life, so it really remained his life's mission to code software not gather the monetary rewards from it. If there is any surprise in this enlightening compilation of quotes, it is that Bill Gates was not a believer in his own software vision from day one. 

He seems to have been torn between seeing what was possible, and worried that somebody else or another rival company, would share a similar vision. Maybe even get there first, and block him or his visionary ideas out of the marketplace. Remember that he could imagine a world then widely dominated by IBM products. However, unlike most, he could see a PC in every office, for every office worker, with everyone using Microsoft software around the globe. It all became a clear reality for many in offices around the world



The Top 3 Takeaways from this book that impact any reader are:

1) There is a lot to learn about how difficult it is to code software. Good software really takes a lot of work. Too many users today who use great software now, they feel it should be easy to use from the beginning. The very hard work needed to make code all work smoothly, is now less understood today, and less appreciated.

2) The impact of wealth was never a major driver for Bill Gates in his early days. You never get a sense that he was playing any game to be the world's richest person. It all came about as a by-product of his strong drive and innovation instinct. Solve a big problem, and money will follow.

3) The technology vision of what Bill Gates saw, that became our current reality in offices today, is now full of PCs and laptops. It was a rare and unique vision. Few at the time agreed with this odd high school student's view of a future business world. He saw this clearly very early on.

Ordinary people do not have those clear visions or pursue them, but he did, and did so in his teens. I now know a little more about why he acted, and what drove him then, and even drives him today. This was a worthwhile read, and not just once. Great for any reader about entrepreneurs, it is not just for technology fans. Highly recommended!

Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, conferences and anything else with a financial theme. Follow us now for our free weekly updates, just click hereThank you for reading and learning more about how money is made in finance! 

If you are interested in Sales & Trading, Banking or FinTech focused roles in Asia or Japan then click here. Follow TMJ Partners on Linkedin Instagram or TwitterWe are the world's #1 recruiter on Twitter, with over 50,000+ followers globally! click here! 

あなたアジア日本セールストレーディング,
バンキング、フィンテックの役割に興味がある場合は、こちらをクリックしてくださいティエムジェィパートナーズLinkedin Instagram またはTwitterでフォローしてください 世界中のTwitter第1位リクルーター50,000以上のフォロワー既に持っています!クリックしてください

For more Buy-Side and Sell-Side roles in Asia-Pacific, contact our TMJ Partners Japan & Asia Finance team.

Tokyo                                          Tokyo




      Mark  Pink                               Shinichi Nagasawa
Direct + 81 3 3505 3891              Direct + 81 3 3505 3891