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Barron

To what do you ascribe the ability of a major macro firm to make money in the markets (i.e. quant-type analysis, Soros type "feel" and fundmamental analysis, superior access to information, etc)

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well i have a vastly biased opinion here so bare with me. macro funds have an advantage iff they can find a methodology in which they can specialize and keep improving. my former fund generated buy/sell decisions through incremental improvement of very detailed and highly integrated algorithms that were thought about constantly & backtested thoroughly. very impressive stuff going on there. part of it did relate to the data, but it wasn't the access. it was the processing. we backfilled so much stuff for analysis it was crazy. and i learned a rediculous amt in a sickly short time.

the advantage was in that we traded only in some of the most liquid markets but incorporated fundamental value, momentum, & inter-market action into the buy sell "signals" better than almost all other participants. our expected risk adjusted return was 1.0. fittingly, we generated about a 1.0 historical information ratio over about 15 years. (i say we for simplicity. i obv am no longer included in "we")

so i guess i ascribe the advantage to "quant" analysis properly implemented & constantly thought about for improvement in addition to a vastly superior processing of information.

"feel" only comes into play during the improvement process. if you can have "feel" you should be able to write down what it is gives you that feeling. once you do that, you can test it, think about it, test it some more and eventually program it into the process you've developed. Alchemy of Finance was almost unreadable once into the experiment. i put it down after i gleaned what i could.

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Also...why aren't you returning there.

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well firstly, i was let go so returning isn't an option. if given the choice though, i'd do it again (i.e. work there and get fired). i think this will probably work out best as the requirements there didn't play optimally into my strengths. i can't wait to see what lies ahead.

on the plus side, i learned a lot (vast understatement). more importantly though, i think i learned a good process for improving and constantly learning.

further, my managers will all give me solid recommendations and the fact that many highly successful people worked there and left or got fired (including former fed economists) means that it doesn't say much about the quality of the employee, only the fit with the firm.

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Lastly, do you agree that economists (that was my major) are "non experts" as described in the Black Swan and basically worthless, particularly as it relates to prediction (I subscribe to this belief, FWIW).

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well i haven't finished or gotten far enough in black swan yet but i think i understand your and taleb's beef.

in terms of prediction, they are pretty worthless. but ironically, the use of the fundamental drivers that come from understanding what is trying to be conveyed by predictive models can be hugely useful in trading. especially where there are non-profit seeking participants.

the fed, though, does a pretty good job as far as managemnet goes and they use predictive models to think about this stuff, so that is aplus for "economists."

but yes...i think that they are for the most part "non expert" experts. i love the FDR quotation: "bring me a one handed economist!" (i think it was FDR)

as always, let me know if i can go deeper anywhere or if i missed your points.

thanks,
Barron