"A Dash" is starting a new series on Hedge Fund Job Interviews. Everything described has a factual basis in that it depicts an actual approach to our company or a more public solicitation. Sometimes the applicants do not want full-time work. Instead they offer a service for a commission. The problem is the same. As the one doing the hiring, you must ask whether there is value exceeding the price.
This series should be of broad interest. Even those hedge fund managers who are not hiring are constantly offerred new trading strategies and systems. The discussion here will help sort the wheat from the chaff. Are you asking the right questions?
This series should also interest individual investors. While you are not hiring employees, your investment in a mutual fund is the equivalent of hiring the fund manager. Are you asking the right questions?
The top trading firms understand a crucial fact, one that we will take up in more detail. If you get an applicant who is a successful trader, was he/she (I'm going to do the he/she once, and then for convenience it will be "he") lucky or good? It is the same problem one confronts when evaluating a new trading system.
There are some resources that explore these questions. As we conduct our interviews, we shall look to some of the principles described by Bill Rempel. We hope to add to the list he has developed and also to consider some of his "job applicants."
A very sophisticated approach to these issues is the subject of many posts at Brett Steenbarger's site. Brett is doing two things simultaneously:
- Studying and evaluating trading systems; and
- Evaluating and improving trader performance.
He understands that the two are related, so we look forward to examining and discussing his methods.
Meanwhile, there are two key points to remember in hiring:
- Everyone sounds good, knows authentic Wall Street Gibberish, and read today's Wall Street Journal. You won't learn anything from that; and
- You can't coach speed!!