Mga Archive ng kategorya,,en,Nai-publish ang aking mga haligi,,en,o malapit nang mailathala,,en,sa The Ngayon Paper,,en,Mga Haligi,,en,Trabaho at Buhay,,en,Ang Stress at isang Sense ng Proporsyon,,en,Hunyo,,en,Komento,,en,Paano natin mapamahalaan ang stress,,en,ibinigay na ito ay hindi maiiwasan sa pagkakaroon ng aming kumpanya,,en,Ang mga karaniwang taktika laban sa stress ay kasama ang ehersisyo,,en,yoga,,en,pagmumuni-muni,,en,mga pamamaraan sa paghinga,,en,reprioritizing pamilya atbp,,en,Upang magdagdag sa listahang ito,,en,Mayroon akong sariling lihim na sandata upang labanan ang stress na nais kong ibahagi sa iyo,,en,Ang mga sandata na ito ay maaaring masyadong makapangyarihan,,en,kaya gamitin ang mga ito nang may pag-aalaga,,en,Isa sa mga lihim kong taktika ay ang pagbuo ng isang proporsyon,,en,hindi nakakapinsala dahil maaaring tunog ito,,en,Ang proporsyon ay maaaring nasa mga tuntunin ng mga numero,,en,Magsimula tayo sa bilang ng mga indibidwal,,en,halimbawa,,en,Tuwing umaga,,en,pagdating namin sa trabaho,,en,nakikita namin ang libu-libong mga mukha na lumulutang,,en,halos lahat ng pupunta sa kani-kanilang mga trabaho,,en: Quantitative Finance

Quantitative Finance is my professional field. I write columns for a well-known periodical in the field called The Wilmott Magazine. Here are those columns and more.

Risks and Rewards

Everything in life comes at a costwith a price tag seldom denominated in dollars and cents, and almost always hidden.

In our profession as quants and traders, we know we cannot accumulate if we don’t speculate (as P. G. Wodehouse puts it). So we accept and even welcome some of these price tags. We take certain risks, which we hope are calculated and understood, so that we can bring unto our employers what is theirs. These are good risks.

Bad risks are those we cannot understand and quantify, or measure and hedge against. They are bad because, even if we rake in some profits, we are never sure that they are commensurate with the downside we are throwing ourselves open to.
Market risk is a good risk. We know how to measure and model it, hedge against and reap rewards from it. We have smart people with bulging foreheads solving stochastic differential equations for us and simplifying the risk-reward equation.

Operational risk is a bad one. We can put as many software locks and control processes as we want around it. But we cannot prevent the rogue elements amongst us from sharing their passwords over a beer in some French brasserie. Worse, we have no idea what the rewards are when we expose ourselves to certain levels of operational risk. Heck, we don’t even know what the levels are because we have no means of quantifying it.

Incomplete appreciation of the risks involved in many situations is an almost philosophical factor that comes around to haunt us. It is not that we underestimate the risks; it is more like we are not aware of certain ramifications. The inconvenient warming of our home planet, for instance, is a consequence that the Wright brothers and Henry Ford simply could not have been aware of.

No such thing as a free lunchthe seemingly unlimited and practically free supply of nuclear energy has a not-so-hidden cost: the necessity to dispose of or securely store dangerous waste for, say, twenty thousand years. How do you store something for that long? After all, twenty thousand years ago, we were only barely human!

But the list of such boons and associated banes is endless. Think of the prosperity that a flattened world (using Thomas Friedman’s lingo) brought to emerging economies like India and China, which came at the expense of the cultural values that took thousands of years of careful nurturing.

A personal ramification of our high-powered corporate life is the alarming level of stress that we put ourselves through. Stress comes from market movements. As the sub-prime market tanked and heads started to roll, some of us had to worry about our heads. Fat bonuses of the first quarter usher in tax worries; lean bonuses indicate uncertain corporate future. Rogue traders burn billions and expose everybody to scrutiny and associated stresses. Even the lack of stress brings in some worries that the corporate world is perhaps passing us by!

When I first switched to the finance industry in late 2005, I happened to flip through an issue of the Bloomberg Market magazine. On of the first things struck me was that most of the advertisements seemed to be of expensive cars or alcohol. Is alcoholism the cost we readily dish out so that we can afford a gleaming dream machine?

Is stress a price worth paying for our corporate success? Are the risks worth their rewards?

Married to the Job — Till Death Do Us Part?

Stress is as much a part of our corporate careers as death is a fact of life. Still, it is best to keep the two (career and death) separate. This is the message that was lost on some hardworking young souls here in Singapore who literally worked themselves to death. So do a lot of Japanese, if we are to believe the media.

Ang dahilan para sa kamatayan sa mga nakakalungkot na trabaho ay ang nakamamatay na kondisyon na tinatawag na malalim na trombosis ng ugat,,en,Ang kondisyon na ito ay bubuo dahil sa pinalawak na oras na ginugol sa pag-upo,,en,kapag bumubuo ang isang clot ng dugo sa mas mababang mga paa,,en,Ang clot pagkatapos ay naglalakbay sa mga mahahalagang organo sa itaas na katawan,,en,kung saan ito ay nagwawasak kabilang ang kamatayan,,en,Ang trick sa pag-iwas sa tulad ng isang untimely demise,,en,syempre,,en,ay hindi umupo nang matagal,,en,Ngunit mas madaling sabihin kaysa sa tapos na,,en,kapag naka-mount ang pressure sa trabaho,,en,at deadlines na lang,,en,Narito kung saan kailangan mong makuha ang iyong mga priyoridad nang diretso,,en,Ano ang higit mong pahalagahan,,en,Ang kalidad ng tagumpay sa buhay o korporasyon,,en,Ang pahiwatig sa pagpili na ito ay hindi ka maaaring pareho,,en,tulad ng inilarawan sa biro sa pamumuhunan sa pamumuhunan na tulad ng,,en,Kung hindi ka makakapasok sa Sabado,,en,wag kang abala sa darating sa Linggo,,en,Kaya mo,,en,gayunpaman,,en. This condition develops because of extended hours spent sitting, when a blood clot forms in the lower limbs. The clot then travels to the vital organs in the upper body, where it wreaks havoc including death.

The trick in avoiding such an untimely demise, of course, is not to sit for long. But that is easier said than done, when job pressure mounts, and deadlines loom.

Here is where you have to get your priorities straight. What do you value more? Quality of life or corporate success? The implication in this choice is that you can’t have both, as illustrated in the joke in investment banking that goes like: “If you can’t come in on Saturday, don’t bother coming in on Sunday!”

You can, however, gumawa ng kompromiso,,en,Posible na bitawan ang kaunting mga adhikain sa karera at pagbutihin ang kalidad ng buhay nang napakalaking,,en,Ang pagkilos na ito sa pagbabalanse ay hindi gaanong simple,,en,wala sa buhay,,en,Ang pag-undermining ng balanse sa buhay-trabaho ay ilang mga kadahilanan,,en,Ang isa ay ang materyalistikong kultura na ating nakatira,,en,Mahirap labanan ang kalakaran na iyon,,en,Pangalawa ay isang maling akala na maaari mong,,en,gawin mo,,en,una,,en,pagkatapos ay umupo at magsaya sa buhay,,en,Ang puntong iyon sa oras kung ikaw ay malaya sa makamundong alalahanin bihirang maging materialize,,en,Pangatlo,,en,maaari kang magkaroon ng isang kasosyo na nakatuon sa karera,,en,Kahit na handa kang gumawa ng isang balanseng diskarte,,en,ang iyong kasosyo ay maaaring hindi,,en,sa gayon nababawasan ang halaga ng pagsasagawa nito,,en,Ito ang mga kadahilanan na dapat mong patuloy na labanan laban,,en,At maaari kang manalo sa labanan,,en,may lohika,,en,disiplina at pagpapasiya,,en,Gayunpaman,,en,may pang-apat,,en. It is possible to let go a little bit of career aspirations and improve the quality of life tremendously. This balancing act is not so simple though; nothing in life is.

Undermining work-life balance are a few factors. One is the materialistic culture we live in. It is hard to fight that trend. Second is a misguided notion that you can “make it” first, then sit back and enjoy life. That point in time when you are free from worldly worries rarely materializes. Thirdly, you may have a career-oriented partner. Even when you are ready to take a balanced approach, your partner may not be, thereby diminishing the value of putting it in practice.

These are factors you have to constantly battle against. And you can win the battle, with logic, discipline and determination. However, there is a fourth, mas makasalanan,,en,kadahilanan,,en,na ang mito na ang isang matagumpay na karera ay isang panukala na lahat o walang anuman,,en,tulad ng ipinahiwatig sa naunang biro sa banking banking,,en,Ito ay isang mito,,en,marahil ay sinasadya na pinalaganap ng mga bosses,,en,na nakabitin sa aming mga ulo ng korporasyon tulad ng tabak ng Damocles,,en,Dahil sa mito,,en,ang mga tao ay nagtatapos sa huli,,en,sinusubukan na gumawa ng isang impression,,en,Ngunit isang impression ang ginawa,,en,hindi sa dami ng trabaho,,en,ngunit sa pamamagitan ng kalidad nito,,en,Lumiko sa kalidad,,en,nakakaapekto sa trabaho,,en,at gagantimpalaan ka,,en,hindi alintana kung gaano katagal upang maisakatuparan ito,,en,Mahabang oras,,en,sa aking pananaw,,en,gawin ang posibilidad ng remote na kalidad ng trabaho,,en,Ang nasabing mapanglaw na mahabang oras ay pinakamahusay na naiwan sa workaholics,,en,patuloy silang nagtatrabaho dahil hindi nila ito matutulungan,,en,Hindi ito gaanong hangarin sa karera,,en,ngunit isang puwersa ng ugali kasama ang isang takot sa buhay panlipunan,,en, factor, which is the myth that a successful career is an all-or-nothing proposition, as implied in the preceding investment banking joke. It is a myth (perhaps knowingly propagated by the bosses) that hangs over our corporate heads like the sword of Damocles.

Because of this myth, people end up working late, trying to make an impression. But an impression is made, not by the quantity of work, but by its quality. Turn in quality, impactful work, and you will be rewarded, regardless of how long it takes to accomplish it. Long hours, in my view, make the possibility of quality work remote.

Such melancholy long hours are best left to workaholics; they keep working because they cannot help it. It is not so much a career aspiration, but a force of habit coupled with a fear of social life.

Upang hampasin ang balanse sa buhay sa trabaho sa aso ng aso na aso ngayon,,en,maaaring kailanganin mong isakripisyo ang ilang mga itaas na rungs ng kawikaan na hagdan ng korporasyon,,en,Nagngangalit laban sa makina ng korporasyon nang walang pagsasaalang-alang sa mga kahihinatnan sa huli ay kumulo sa isang simpleng pagsasakatuparan,,en,na ang paggawa ng isang buhay na halaga sa wala kung ang iyong buhay ay nawala sa proseso,,en,Pagpapakilala sa Spousal,,en,Nagbibigay ba tayo ng isang Pinsala,,en,Pagkatapos ng isang mahabang araw sa trabaho,,en,nais mong pahinga ang iyong pagod na pag-iisip,,en,baka gusto mong gloat ng kaunti tungkol sa iyong maliit na tagumpay,,en,o bumulong nang kaunti tungkol sa iyong maliit na mga pag-iingat sa araw,,en,Ang mainam na biktima para sa katoliko ng kaisipan na ito ay iyong asawa,,en,Ngunit ang asawa,,en,sa dobleng pamilya ng kita ngayon,,en,nagdurusa din sa isang pagod na pag-iisip sa pagtatapos ng araw,,en, you may have to sacrifice a few upper rungs of the proverbial corporate ladder. Raging against the corporate machine with no regard to the consequences ultimately boils down to one simple realization — that making a living amounts to nothing if your life is lost in the process.

Spousal Indifference — Do We Give a Damn?

After a long day at work, you want to rest your exhausted mind; may be you want to gloat a bit about your little victories, or whine a bit about your little setbacks of the day. The ideal victim for this mental catharsis is your spouse. But the spouse, in today’s double income families, is also suffering from a tired mind at the end of the day.

Ang pag-uusap sa pagitan ng dalawang pagod na pag-iisip ay karaniwang wala ng isang mahalagang sangkap,,en,ang tagapakinig,,en,At ang isang pag-uusap na walang tagapakinig ay hindi halos lahat ng pag-uusap,,en,Ito ay lamang ng dalawang mga monologue na magtatapos sa pagbuo ng isa pang kahihinatnan sa pag-iingat tungkol sa,,en,pagwawalang-bahala sa spousal,,en,Ang pagwawalang-bahala ay walang maliit na bagay upang maiinis,,en,Ito ay kabaligtaran ng pag-ibig,,en,kung maniniwala tayo kay Elie Weisel,,en,Kaya kailangan nating bantayan laban sa kawalang-interes kung nais nating magkaroon ng isang shot sa kaligayahan,,en,para sa isang walang buhay na buhay ay bihirang isang masaya,,en,Kung saan nakakuha ng oras,,en,tanungin namin ang mga Singaporean,,en,masyadong abala upang makabuo ng isang kumpletong pangungusap,,en,Ah,,en,oras,,en,Sa puso ng lahat ng ating makamundong pagkabahala,,en,Kami lang,,en,oras nito sa isang araw bago bukas ay sumingil,,en,natatanggal ang lahat ng ating marangal na hangarin sa araw,,en,At nagsisimula ang isa pang siklo,,en — the listener. And a conversation without a listener is not much of a conversation at all. It is merely two monologues that will end up generating one more setback to whine about — spousal indifference.

Indifference is no small matter to scoff at. It is the opposite of love, if we are to believe Elie Weisel. So we do have to guard against indifference if we want to have a shot at happiness, for a loveless life is seldom a happy one.

“Where got time?” ask we Singaporeans, too busy to form a complete sentence. Ah… time! At the heart of all our worldly worries. We only have 24 hours of it in a day before tomorrow comes charging in, obliterating all our noble intensions of the day. And another cycle begins, isa pang hindi maipalabas na rebolusyon ng malaking gulong,,en,at nagpapatuloy ang lahi ng daga,,en,Ang problema sa lahi ng daga ay iyon,,en,sa dulo nito,,en,kahit manalo ka,,en,ikaw pa rin ang daga,,en,Paano natin masisira ang bisyo na ito,,en,Maaari tayong magsimula sa pamamagitan ng pakikinig kaysa sa pakikipag-usap,,en,Ang pakikinig ay hindi kasing dali,,en,Karaniwan kaming nakikinig nang may isang buong bungkos ng mga mental na filter na naka-on,,en,patuloy na paghusga at pagproseso ng lahat ng ating naririnig,,en,Pinangalanan namin ang papasok na mga pahayag bilang mahalaga,,en,kapaki-pakinabang,,en,walang halaga,,en,kalunus-lunos,,en,atbp,,en,At iniimbak namin ang mga ito ng naaangkop na timbang sa aming pagod na utak,,en,hindi papansin ang isang importanteng katotohanan,,en,na ang mga label ng speaker ay maaaring,,en,at madalas ay,,en,ganap na naiiba,,en,Dahil sa ganitong potensyal na maling pag-aalinlangan,,en, and the rat race goes on.

The trouble with the rat race is that, at the end of it, even if you win, you are still a rat!

How do we break this vicious cycle? We can start by listening rather than talking. Listening is not as easy as it sounds. We usually listen with a whole bunch of mental filters turned on, constantly judging and processing everything we hear. We label the incoming statements as important, useful, trivial, pathetic, etc. And we store them away with appropriate weights in our tired brain, ignoring one crucial fact — that the speaker’s labels may be, and often are, completely different.

Due to this potential mislabeling, ano ang maaaring pinakamahalagang tagumpay o sakit sa puso ng araw para sa iyong asawa o kapareha ay maaaring hindi sinasadyang mai-drag at ibagsak sa recycle bin ng iyong isip,,en,Iwasan ang hindi sinasadyang kalupitan,,en,patayin ang iyong mga filter at makinig sa iyong puso,,en,Tulad ng pinapayuhan ni Wesley Snipes na Woody Herrelson sa,,en,Hindi Tumalon ang White Men,,en,pakinggan mo sya,,en,o siya,,en,tulad ng kaso.,,en,Nagbabayad ito upang magsagawa ng tulad ng isang walang pinapanigan at walang kondisyon na pakikinig na istilo,,en,Pinagkasundo nito ang iyong mga priyoridad sa iyong asawa at hinila ka mula sa kailaliman ng spousal apathy,,en,Ngunit walang bagay tulad ng isang libreng tanghalian,,en,Tumatagal ng mga taon ng pagsasanay upang mabuo ang wastong pamamaraan sa pakikinig,,en,at ipinagpatuloy ang pasensya at sinasadyang pagsisikap na mailapat ito,,en,baka magtanong tayo,,en,Kumbaga,,en,hayaan ang oras,,en,o gawing pinakamahusay ang kung anong kaunting oras na nakuha namin,,en. Avoid this unintentional cruelty; turn off your filters and listen with your heart. As Wesley Snipes advises Woody Herrelson in White Men Can’t Jump, listen to her (or him, as the case may be.)

It pays to practice such an unbiased and unconditional listening style. It harmonizes your priorities with those your spouse and pulls you away from the abyss of spousal apathy. But it takes years of practice to develop the proper listening technique, and continued patience and deliberate effort to apply it.

“Where got time?” we may ask. Well, let’s make time, or make the best of what little time we got. Kung hindi man,,en,kapag ang mga araw ay nagdaragdag ng mga buwan at taon,,en,baka lumingon tayo at magtaka,,en,nasaan ang buhay na nawala sa buhay natin,,en,Kung magkano ang Talent Worth,,en,Ang Singapore ay nangangailangan ng dayuhang talento,,en,Ang pangangailangan na ito ay walang masamang pakiramdam,,en,Ito ay isang istatistika na katotohanan ng buhay,,en,Para sa bawat nangungunang Singaporean sa anumang larangan,,en,maging science ito,,en,gamot,,en,pananalapi,,en,sports o kung ano man,,en,malalaman natin ang tungkol sa,,en,mga propesyonal ng pantay na kalibre sa China at India,,en,Hindi dahil tayo,,en,beses mas mababa talented,,en,lamang na mayroon sila,,en,maraming beses na mga tao,,en,Kaisa sa labis na istatistika na kataas-taasang,,en,ang ilang mga bansa ay may espesyal na kahalagahan sa kanilang napili o hindi sinasadyang mga espesyalista,,en,Inaasahan naming makahanap ng mas maraming mga eksperto sa hardware sa China,,en,higit pang mga gurus ng software sa India,,en,higit pang mga manlalaro ng badminton sa Indonesia,,en,higit pang diwa sa pangnegosyo at kadalubhasaan sa pamamahala sa kanluran,,en,Kailangan namin ng ganitong mga eksperto,,en, when days add up to months and years, we may look back and wonder: Where is the life that we lost in living?

Stress and a Sense of Proportion

How can we manage stress, given that it is unavoidable in our corporate existence? Common tactics against stress include exercise, yoga, meditation, breathing techniques, reprioritizing family etc. To add to this list, I have my own secret weapons to battle stress that I would like to share with you. These weapons may be too potent; so use them with care.

One of my secret tactics is to develop a sense of proportion, harmless as it may sound. Proportion can be in terms of numbers. Let’s start with the number of individuals, for instance. Every morning, when we come to work, we see thousands of faces floating by, almost all going to their respective jobs. Sandali upang tumingin sa kanila,,en,bawat isa ay may sariling mga sariling pag-iisip at nagmamalasakit,,en,mga alala at stress,,en,Sa bawat isa sa kanila,,en,ang totoong stress lang ang kanilang sarili,,en,Kapag alam na natin iyon,,en,bakit natin mahahalagahan ang ating sariling stress kaysa sa ibang tao,,en,Ang pagpapahalaga sa manipis na bilang ng mga personal na stress sa lahat sa paligid natin,,en,kung titigil tayo sa pag-iisip tungkol dito,,en,ilalagay ang ating mga alalahanin sa pananaw,,en,Ang proporsyon sa mga tuntunin ng aming sukat ay isang bagay na dapat ding pag-isipan muli,,en,Nasakop namin ang isang maliit na maliit na bahagi ng isang malaking gusali na aming lugar ng trabaho,,en,Pagsasalita ng istatistika,,en,ang mambabasa ng haligi na ito ay hindi malamang na sumakop sa isang malaking sulok ng tanggapan,,en,Sinasakop ng gusali ang isang maliit na bahagi ng puwang na aming minamahal na lungsod,,en,Ang lahat ng mga lungsod ay napakaliit na ang isang tuldok sa mapa ng mundo ay karaniwang isang overstatement ng kanilang sukat,,en — each with their own personal thoughts and cares, worries and stresses.

To each of them, the only real stress is their own. Once we know that, why would we hold our own stress any more important than anybody else’s? The appreciation of the sheer number of personal stresses all around us, if we stop to think about it, will put our worries in perspective.

Proportion in terms of our size also is something to ponder over. We occupy a tiny fraction of a large building that is our workplace. (Statistically speaking, the reader of this column is not likely to occupy a large corner office!) The building occupies a tiny fraction of the space that is our beloved city. All cities are so tiny that a dot on the world map is usually an overstatement of their size.

Ang ating mundo,,en,ang mundo,,en,ay isang maliit na butil lamang ng alikabok ng ilang milya mula sa isang fireball,,en,kung iisipin natin ang araw bilang isang fireball ng anumang naiisip na laki,,en,Ang araw at ang solar system nito ay napakaliit na kung nais mong ilagay ang larawan ng aming kalawakan bilang wallpaper sa iyong PC,,en,magbabahagi sila ng isang pixel sa ilang libong lokal na bituin,,en,At ang ating kalawakan,,en,wag mo ako pasimulan,,en,Marami tayong bilyun-bilyon sa kanila,,en,Ang ating pag-iral,,en,sa lahat ng aming mga pagkabahala at stress,,en,halos hindi gaanong maliit,,en,Ang kakulangan ng ating pag-iral ay hindi limitado sa espasyo,,en,umaabot din ito sa oras,,en,Ang oras ay nakakalito pagdating sa isang pakiramdam ng proporsyon,,en,Isipin natin ang uniberso bilang,,en,taong gulang,,en,Gaano katagal sa tingin mo ang aming pag-iral ay nasa scale na iyon,,en,Mga ilang segundo,,en,Nilikha tayo mula sa dust ng bituin,,en, the earth, is a mere speck of dust a few miles from a fireball, if we think of the sun as a fireball of any conceivable size. The sun and its solar system are so tiny that if you were to put the picture of our galaxy as the wallpaper on your PC, they would be sharing a pixel with a few thousand local stars! And our galaxy — don’t get me started on that! We have countless billions of them. Our existence (with all our worries and stresses) is almost incomprehensibly small.

The insignificance of our existence is not limited to space; it extends to time as well. Time is tricky when it comes to a sense of proportion. Let’s think of the universe as 45 years old. How long do you think our existence is in that scale? Eight seconds if we are very lucky!

We are created out of star dust, huling para sa isang lamang kosmolohikal na instant,,en,at pagkatapos ay bumalik sa alabok ng bituin,,en,Ang mga makina ng DNA sa oras na ito,,en,nagpapatakbo kami ng hindi kilalang mga genetic algorithm,,en,na nagkakamali tayo sa ating mga hangarin at nakamit,,en,o stress at pagkabigo,,en,Mamahinga,,en,Huwag kang mag-alala,,en,maging masaya,,en,Oo naman,,en,maaari kang makakuha ng reprimanded kung ang ulat na iyon ay hindi lalabas bukas,,en,O,,en,maaaring magalit ang iyong tagapagtustos na maantala ang iyong pagbabayad,,en,maaaring ipadala ng iyong kasamahan ang backstabbing email na iyon,,en,at Bcc ang iyong boss,,en,kung hindi mo magagawang ang mga ito,,en,Ngunit,,en,hindi mo ba nakikita,,en,sa kaisipang humahous na uniberso na ito,,en,hindi mahalaga ang isang iota,,en,Sa malaking pamamaraan ng mga bagay,,en,ang iyong pagkapagod ay hindi kahit na static na ingay,,en,Ang mga pangangatwiran para sa pagpapanatili ng isang antas ng stress ang lahat ng bisagra sa isang hindi sinasadya na iniisip na tumutulong sa pagiging produktibo ng stress,,en,Hindi,,en, and then turn back into star dust. DNA machines during this time, we run unknown genetic algorithms, which we mistake for our aspirations and achievements, or stresses and frustrations. Relax! Don’t worry, be happy!

Sure, you may get reprimanded if that report doesn’t go out tomorrow. Or, your trader may bite your head off if that pricing model is delayed again. Or, your colleague may send out that backstabbing email (and Bcc your boss) if you displease them. But, don’t you get it, in this mind-numbingly humongous universe, it doesn’t matter an iota. In the big scheme of things, your stress is not even static noise!

Arguments for maintaining a level of stress all hinge on an ill-conceived notion that stress aids productivity. It does not. Ang susi sa pagiging produktibo ay isang saloobin ng kagalakan sa trabaho,,en,Kapag tumigil ka sa pagkabalisa tungkol sa mga reprimand at backstabs at accolades,,en,at simulan ang kasiyahan sa iyong ginagawa,,en,nangyayari lang ang produktibo,,en,Alam kong ito ay medyo may pagka-idealista,,en,ngunit ang aking pinaka-produktibong piraso ng trabaho ay nangyari sa ganoong paraan,,en,Ang kasiyahan sa ginagawa ko ay isang perpektong kukunan ko ng shoot kahit anong araw,,en,balanse sa buhay sa trabaho,,en,Pagbasa sa Internet,,en,Ang mga pangunahing pagbabago ay walang kadahilanan,,en,Sila ay naging daan sa huling dalawampung taon,,en,Pinag-uusapan ko kung paano natin nalaman ang mga bagay,,en,kung paano natin mabasa,,en,kung paano namin ginagawa ang pangunahing aritmetika at iba pa,,en,Sa high school,,en,Gumamit ako ng mga talahanayan ng logarithm upang mag-ehersisyo ang mga resulta sa mga eksperimento sa pisika at kimika,,en,Hindi pinapayagan ang mga calculator,,en,Kahit na abala,,en,ang kasanayang ito ay pinarangalan ang aking mga kasanayan sa aritmetika,,en,ang mga kasanayan na ang mga calculator at mga spreadsheet ay nawala sa ngayon,,en. When you stop worrying about reprimands and backstabs and accolades, and start enjoying what you do, productivity just happens. I know it sounds a bit idealistic, but my most productive pieces of work happened that way. Enjoying what I do is an ideal I will shoot for any day.

Stress and Metaphysics

Realizing that our existence is a mere blink of an eye in time, and less than a speck of dust in space is a powerful way of cutting our stress to size. My favorite weapon, however, is even more potent. I ask myself a basic questionwhat are space and time to begin with?

These may sound like silly metaphysical musings that have no relevance to real life. But they have been the subject matter of many lifelong quests over the ages. If we, humanity as a whole, cannot stop pondering over such things, it is probably because they form the basis of our existence. Besides, our stress takes place in space and time.

Philosophical grand-standing aside, let’s get to the meat of the problem: What is space? Space seems to be closely associated with our sense of sight. It also forms the basis of our realityeverything happens in space and time. For this reason, “What are space and time?” is a question that cannot be reduced to simpler elements in our reality.

We can, however, approach the issue by posing a similar questionWhat is sound?” Sound is an experience associated with hearing, clearly. But what is it? The answer is hinted at in the age-old conundrum of a falling tree in a deserted forest. Does it make sound? A popular topic of conservation in cocktail parties, this question is also a serious contemplative inquiry for a Zen monk.

The knee-jerk response to the question is, yes, the tree does make sound. It’s just that there is nobody to hear it. But hear what exactly?

Sure, the falling tree creates air pressure waves. But, the waves are not sound. These waves create an electrical signal in the ear, if an ear is present. Electrical signals are electrical signals, not sound. These signals, when transported to the brain, induce neuronal firing, which is still not sound. It is a fallacy to think of sound as anything physical, anything real. Sound is an experience or a cognitive representation associated with the input signals (which are the pressure waves, we think. But are they?)

We can draw similar analogies between other sensations and the corresponding signalstaste and smell to chemical composition, for instance. What about sight? What is thesensationor the cognitive representation associated with sight? It is what we think of as space.

Of course, we think of space as real, as the basis of our reality. It takes more than this short column to shake our belief in it. That’s why I wrote my bookThe Unreal Universe.

To me, the unreal nature of what we consider reality is more than a constant contemplation. It is a source of a Zen-like immunity against stress and other worldly worries.

Yes, stress is the cost exacted by the corporate chain of command. It is a cost most of us happily pay, for the rewards are abundantly clear. But we have to be aware of the risks associated with the rewardsboth in accepting them and in declining them.

Quant Talent Management

The trouble with quants is that it is hard to keep them anchored to their moorings. Their talent is in high demand for a variety of reasons. The primary reason is the increasing sophistication of the banking clients, who demand increasingly more structured products with specific hedging and speculative motives. Servicing their demand calls for a small army of quants supporting the trading desks and systems.

Since structured products are a major profit engine on the trading floor of most banks, this demand represents a strong pull factor for quants from competing institutions. There is nothing much most financial institutions can do about this pull factor, except to pull them back in with offers they can’t refuse.

But we can try to eliminate the push factors that are hard to identify. These push factors are often hidden in the culture, ethics and the way things get done in institutions. They are, therefore, specific to the geographical location and the social settings where the banks operate.

Performance Appraisal — Who Needs It?

Performance appraisal is a tool for talent retention, if used wisely. But, if misused, it can become a push factor. Are there alternatives that will aid in retaining and promoting talent?

As it stands now, we go through this ordeal of performance appraisal at least once every year. Our career progression, bonus and salary depend on it. So we spend sleepless nights agonizing over it.

In addition to the appraisal, we also get our “key performance indicators” or KPIs for next year. These are the commandments we have to live by for the rest of the year. The whole experience of it is so unpleasant that we say to ourselves that life as an employee sucks.

The bosses fare hardly better though. They have to worry about their own appraisals by bigger bosses. On top of that, they have to craft the KPI commandments for us as well — a job pretty darned difficult to delegate. In all likelihood, they say to themselves that their life as a boss sucks!

Dahil sa walang sinuman ay nasasabik tungkol sa ehersisyo ang pag-ehersisyo,,en,bakit natin ito ginagawa,,en,Sino ang nangangailangan nito,,en,Ang layunin sa likod ng pagpapahalaga sa pagganap ay marangal,,en,Nagsusumikap na gantimpalaan ang mahusay na pagganap at parusahan ang mga mahihirap na palabas,,en,ang matandang karot at stick management paradigm,,en,Ang layunin na ito ay madaling natutugunan sa isang maliit na samahan nang walang pangangailangan para sa isang pormal na proseso ng tasa,,en,Alam ng mga maliliit na may-ari ng negosyo kung sino ang dapat itago at kung sino ang magbalot,,en,Ngunit sa isang malaking katawan ng korporasyon na may libu-libong mga empleyado,,en,paano ka magdisenyo ng isang patas at pare-pareho na scheme ng kabayaran,,en,Ang solusyon,,en,ay magbayad ng isang malinis na kabuuan sa mga consultant na nagdidisenyo ng mga form ng tasa at tukuyin ang isang pare-parehong proseso,,en,masyadong uniporme,,en,marahil,,en,Ang nasabing mga form na pandiwa at hindi nababaluktot na proseso ay may mga likas na problema,,en,Ang isang problema ay ang pagtuon ay lumilipas mula sa orihinal na layunin,,en, why do we do it? Who needs it?

The objective behind performance appraisal is noble. It strives to reward good performance and punish poor shows — the old carrot and stick management paradigm. This objective is easily met in a small organization without the need for a formal appraisal process. Small business owners know who to keep and who to sack. But in a big corporate body with thousands of employees, how do you design a fair and consistent compensation scheme?

The solution, of course, is to pay a small fortune to consultants who design appraisal forms and define a uniform process — too uniform, perhaps. Such verbose forms and inflexible processes come with inherent problems. One problem is that the focus shifts from the original objective (karot at stick,,en,sa pagiging patas at pare-pareho,,en,isang sukat para sa lahat,,en,Isip mo,,en,alam ng karamihan sa mga boss kung sino ang gagantimpalaan at kung sino ang magpayuhan,,en,Ngunit nais ng HR department na ang mga boss ay sumunod sa isang pantay na proseso,,en,sa gayon ang pagtaas ng karga sa lahat,,en,Isa pa,,en,higit pang nakakabaliw na problema sa diskarte na hinimok sa pagkonsulta na ito ay kinakailangan na nakatuon patungo sa mediocrity,,en,Kapag nagdidisenyo ka ng isang proseso ng pag-aalaga upang masilayan ang lahat,,en,ang pinakamahusay na maaari mong asahan upang makamit ay upang mapabuti ang average na antas ng pagganap nang kaunti,,en,Kasunod ng nasabing proseso,,en,ang siyentipiko ng CERN na nag-imbento ng World Wide Web ay malala nang masama,,en,sapagkat hindi siya nag-concentrate sa kanyang mga KPI at nasayang sa lahat ng oras niya na iniisip ang tungkol sa mga paglilipat ng file,,en,Ang CERN ay isang lugar na patuloy na gumagawa ng mga Nobel laure,,en) to fairness and consistency (one-size-fits-all). Mind you, most bosses know who to reward and who to admonish. But the HR department wants the bosses to follow a uniform process, thereby increasing everybody’s workload.

Another, more insidious problem with this consultancy driven approach is that it is necessarily geared towards mediocrity. When you design an appraisal process to cater to everybody, the best you can hope to achieve is to improve the average performance level by a bit. Following such a process, the CERN scientist who invented the World Wide Web would have fared badly, for he did not concentrate on his KPIs and wasted all his time thinking about file transfers!

CERN is a place that consistently produces Nobel laureates. How does it do it? Certainly not by following processes that are designed to make incremental improvements at the average level. The trick is to be a center for excellence which attracts geniuses.

Of course, it is not fair to compare an average bank with CERN. But we have to realize that the verbose forms, which focus on averages and promote mediocrity, are a poor tool for innovation management, especially when we are trying to retain and encourage excellence in quant talent.

A viable alternative to standardized and regimented appraisal processes is to align employee objectives with those of the institutions and leave performance and reward management to bosses. With some luck, this approach may retain fringe geniuses and promote innovation. At the very least, it will alleviate some employee anxiety and sleepless nights.

To Know or Not To Know

One peculiar push factor in the Asian context is the lack of respect for technical knowledge. Technical knowledge is not always a good thing in the modern Asian workplace. Unless you are careful, others will take advantage of your expertise and dump their responsibilities on you. Maaaring hindi mo ito iniisip hangga't iginagalang nila ang iyong kadalubhasaan,,en,madalas silang nakakuha ng kredito para sa iyong trabaho at ipinakita ang kanilang kakayahang umiwas sa trabaho bilang mga kasanayan sa pamamahala ng mga tao,,en,Ang pamamahala ng mga tao ay mas mahusay na gagantimpalaan kaysa sa kadalubhasaan sa teknikal,,en,Ang pagkakaiba-iba sa pagitan ng mga eksperto at tagapamahala ng gitnang antas sa mga tuntunin ng gantimpala ay isang lokal na kababalaghan sa Asya,,en,Dito,,en,ang mga nagtatanghal ng trabaho ay tila nakakakuha ng kredito para dito,,en,anuman ang aktwal na gumaganap nito,,en,Nakatira kami sa isang lugar at oras kung saan ang articulation ay madalas na nagkakamali sa mga nagawa,,en,Sa kanluran,,en,ang kaalaman sa teknikal ay mas madaling kilalanin kaysa sa makinis na mga pagtatanghal,,en,Hindi mo kailangang tumingin sa kabila ng Bill Gates upang pahalagahan ang mga taas na maaaring dalhin sa iyo ng teknikal na kadalubhasaan,,en,Syempre,,en,Ang mga Gate ay higit pa sa isang dalubhasa,,en. But, they often hog the credit for your work and present their ability to evade work as people management skills.

People management is better rewarded than technical expertise. This differentiation between experts and middle-level managers in terms of rewards is a local Asian phenomenon. Here, those who present the work seem to get the credit for it, regardless of who actually performs it. We live in a place and time where articulation is often mistaken for accomplishments.

In the West, technical knowledge is more readily recognized than smooth presentations. You don’t have to look beyond Bill Gates to appreciate the heights to which technical expertise can take you in the West. Of course, Gates is more than an expert; siya ay pinuno din ng mahusay na pangitain,,en,Ang mga namumuno ay naiiba sa mga tagapamahala ng mga tao,,en,Nagbibigay ng inspirasyon at direksyon ang mga pinuno,,en,Lubhang kailangan nila sa lahat ng mga samahan,,en,malaki at maliit,,en,Hindi sila malilito sa mga taong nasa gitna na antas na patuloy na kumakalat sa,,en,malaking larawan,,en,ang,,en,halaga-chain,,en,at tulad nito,,en,at ginugol ang lahat ng kanilang mga oras ng pagtatrabaho sa mga pulong,,en,Alam mo kung sino ang tinutukoy ko,,en,Bakit sila makakakuha ng ganoong mabigat na sweldo kung alam nila at kakaunti ang kanilang ginagawa,,en,Hindi tulad ng mga mangers ng mga tao,,en,ang mga dalubhasang teknikal ay matalinong cookies,,en,Madali nilang makita na kung nais nilang maging mga tagapamahala ng mga tao,,en,maaari silang magsimula sa isang kurbatang at isang mahusay na gupit,,en,Kung ang mga pick ay mayaman,,en,bakit hindi nila,,en,Ang pagpunta sa iba pang paraan ay mas mahirap kahit na,,en,Para sa isang purong tagapamahala ng tao upang maging isang dalubhasa sa teknikal,,en.

Leaders are different from people managers. Leaders provide inspiration and direction. They are sorely needed in all organizations, big and small.

Unlike people mangers, quants and technical experts are smart cookies. They can easily see that if they want to be people managers, they can get started with a tie and a good haircut. If the pickings are rich, why wouldn’t they?

This Asian differentiation between quants and managers, therefore, makes for a strong push factor for some quants who find it worthwhile to hide their technical skills, get that haircut, grab that tie, and become a people manager. Of course, it comes down to your personal choice between fulfilment and satisfaction originating from technical authority on the one hand, and convenience and promotions arising from people skills on the other.

I wonder whether we have already made our choices, even in our personal lives. We find fathers who cannot get the hang of changing diapers household chores. Posible bang hindi alam ng mga kalalakihan ang mga washing machine at microwaves bagaman maaari silang gumana ng kumplikadong makinarya sa trabaho,,en,Natagpuan din namin ang mga kababaihan na hindi mababalanse ang kanilang mga account at tinantya ang kanilang paggasta,,en,Ito ba talaga ang isang kahinaan sa matematika,,en,o isang bagay ng kaginhawaan,,en,Paminsan-minsan,,en,ang kakulangan ng kaalaman ay bilang isang sandata bilang kasaganaan nito,,en,Oo,,en,ang kaalaman ay isang dobleng tabak,,en,Maingat na gamitin ito,,en,kasanayan sa pamamahala ,,en,kaalamang pang-teknikal,,en,Nagpakasal sa Trabaho,,en,Hanggang sa Kamatayan ba ang Bahagi Kami,,en,Ang stress ay kasing bahagi ng aming mga karera sa korporasyon dahil ang kamatayan ay isang katotohanan ng buhay,,en,Pa rin,,en,pinakamahusay na panatilihin ang dalawa,,en,karera at kamatayan,,en,magkahiwalay,,en,Ito ang mensahe na nawala sa ilang masipag na mga kaluluwa dito na literal na nagtatrabaho sa kanilang sarili hanggang kamatayan,,en,Kaya gumawa ng maraming Japanese,,en,kung maniniwala tayo sa media,,en? We also find ladies who cannot balance their accounts and estimate their spending. Is it really a mathematical impairment, or a matter of convenience? At times, the lack of knowledge is as potent a weapon as its abundance.

How Much is Talent Worth?

Banks deal in money. Our profession in finance teaches us that we can put a dollar value to everything in life. Talent retention is no different. After taking care of as much of the push factors as we can, the next question is fairly simple: How much does it take to retain talent?

My city-state of Singapore suffers from a special disadvantage when it comes to talent management. We need foreign talent. It is nothing to feel bad about. It is a statistical fact of life. For every top Singaporean in any field — be it finance, science, medicine, sports or whatever — we will find about 500 professionals of equal calibre in China and India. Not because we are 500 times less talented, just that they have 500 times more people.

Coupled with overwhelming statistical supremacy, certain countries have special superiority in their chosen or accidental specializations. We expect to find more hardware experts in China, more software gurus in India, more badminton players in Indonesia, more entrepreneurial spirit and managerial expertise in the west.

We need such experts, kaya inuupahan namin sila,,en,Ngunit kung ano ang dapat nating bayaran sa kanila,,en,Iyon ay kung saan pumapasok ang ekonomiya,,en,demand at supply,,en,Nag-aalok kami ng pinakamababang posibleng pakete na kagat ng talent,,en,Nasa isang expatriate package ako nang dumating ako sa Singapore bilang isang foreign talent,,en,Ito ay isang medyo mapagbigay na package,,en,ngunit matalinong salita na kung ako ay naging isang,,en,lokal,,en,talento,,en,Mawawala ako ng kaunti,,en,Naging lokal ako makalipas ang ilang taon,,en,at nabawasan ang aking kabayaran bilang kinahinatnan,,en,Hindi nagbago ang talento ko,,en,ang label lamang mula sa,,en,dayuhan,,en,sa,,en,lokal.,,en,Ang karanasan na ito ay nagparamdam sa akin ng kaunti tungkol sa halaga ng talento at ang halaga ng mga label,,en,Ang mga halagang ito ay isinalin sa mga pakete ng kabayaran na maaaring mag-utos,,en,mula mataas hanggang mababa,,en,bilang,,en,Kanluranin,,en,Caucasian,,en,ng pinanggalingan ng Asya,,en,Singaporean,,en,Asyano,,en,Intsik,,en,Indian,,en,atbp.,,en. But how much should we pay them? That’s where economics comes in — demand and supply. We offer attractive expatriate packages that the talents would bite.

I was on an expatriate package when I came to Singapore as a foreign talent. It was a fairly generous package, but cleverly worded so that if I became a “local” talent, I would lose out quite a bit. I did become local a few years later, and my compensation diminished as a consequence. My talent did not change, just the label from “foreign” to “local.”

This experience made me think a bit about the value of talent and the value of labels. The local quant talents, too, are beginning to take note of the asymmetric compensation structure associated with labels. This asymmetry and the consequent erosion of loyalty introduce another push factor for the local quant talents, as if one was needed.

The solution to this problem is not a stricter enforcement of the confidentiality of salaries, but a more transparent compensation scheme free of anomalies that can be misconstrued as unfair practices. Kung hindi man,,en,kapag ang mga araw ay nagdaragdag ng mga buwan at taon,,en,baka lumingon tayo at magtaka,,en,nasaan ang buhay na nawala sa buhay natin,,en,Kung magkano ang Talent Worth,,en,Ang Singapore ay nangangailangan ng dayuhang talento,,en,Ang pangangailangan na ito ay walang masamang pakiramdam,,en,Ito ay isang istatistika na katotohanan ng buhay,,en,Para sa bawat nangungunang Singaporean sa anumang larangan,,en,maging science ito,,en,gamot,,en,pananalapi,,en,sports o kung ano man,,en,malalaman natin ang tungkol sa,,en,mga propesyonal ng pantay na kalibre sa China at India,,en,Hindi dahil tayo,,en,beses mas mababa talented,,en,lamang na mayroon sila,,en,maraming beses na mga tao,,en,Kaisa sa labis na istatistika na kataas-taasang,,en,ang ilang mga bansa ay may espesyal na kahalagahan sa kanilang napili o hindi sinasadyang mga espesyalista,,en,Inaasahan naming makahanap ng mas maraming mga eksperto sa hardware sa China,,en,higit pang mga gurus ng software sa India,,en,higit pang mga manlalaro ng badminton sa Indonesia,,en,higit pang diwa sa pangnegosyo at kadalubhasaan sa pamamahala sa kanluran,,en,Kailangan namin ng ganitong mga eksperto,,en, we may see an increasing number of Asian nationals using Singapore-based banks as a stepping stone to greener pastures. Worse, we may see (as indeed we do, these days) locals seeking level playing fields elsewhere.

We need to hire the much needed talent whatever it costs; but let’s not mistake labels for talent.

Paghahawak ng Goodbyes,,en,Kumapit sa iyong pantalon,,en,ang iyong pangunahing tauhan ay isinuko lamang ang kanyang pagbibitiw,,en,ang pinakapangit mong bangungot bilang isang manager,,en,Kapag ang alikabok ay tumatakbo at ang sindak ay humupa,,en,nagsisimula kang magtanong sa iyong sarili,,en,anong sunod,,en,Ang pagpapanatili ng kawani ay isang pangunahing problema sa kasalukuyang merkado ng trabaho sa Singapore,,en,Ang ating ekonomiya ay maayos,,en,ang aming trabaho sa merkado ay pula,,en,Ang resulta,,en,ang mga bagong alok sa trabaho ay lalong nagiging hindi mapaglabanan,,en,Sa ilang yugto,,en,isang taong nagtatrabaho ka nang malapit,,en,maging iyong kawani,,en,iyong boss o isang kapwa miyembro ng koponan,,en,ay isusumite sa nakamamanghang sulat na iyon sa HR,,en,Ang paghawak sa mga pagbibitiw na may taktika at biyaya ay hindi na isang kanais-nais na kalidad lamang,,en,ngunit isang mahalagang kasanayan sa korporasyon ngayon,,en,Mayroon kaming ilang mga pangkalahatang diskarte upang harapin ang mga pagbibitiw,,en,Ang unang hakbang ay upang masuri ang pagganyak sa likod ng pagpili ng karera,,en

Losing talent is an inevitable part of managing it. What do you do when your key quant hands in the dreaded letter? It is your worst nightmare as a manager! Once the dust settles and the panic subsides, you should ask yourself, what next?

Because of all the pull and push factors discussed so far, quant staff retention is a challenge. New job offers are becoming increasingly more irresistible. At some stage, someone you work closely with — be it your staff, your boss or a fellow team member — is going to say goodbye. Handling resignations with tact and grace is no longer merely a desirable quality, but an essential corporate skill today.

We do have some general strategies to deal with resignations. The first step is to assess the motivation behind the career choice. Pera ba ito,,en,Kung gayon,,en,ang isang counter alok ay karaniwang matagumpay,,en,Nag-aalok ang counter,,en,kapwa ginagawa nila at kinukuha,,en,ay itinuturing na hindi epektibo at sa hindi magandang lasa,,en,Kahit na,,en,iginiit ng mga executive search firms na sila,,en,Ngunit pagkatapos,,en,sasabihin nila iyon,,en,hindi nila,,en,Kung ang pag-uudyok sa likod ng pagbibitiw ay ang katangian ng kasalukuyan o sa hinaharap na trabaho at mga hamon nito,,en,isang pag-ilid ng paggalaw o reassignment,,en,posibleng pinagsama sa counter counter,,en,maaaring maging epektibo,,en,Kung nabigo ang lahat,,en,pagkatapos ay oras na upang magpaalam,,en,amicably,,en,Mahalaga na mapanatili ang amicability na ito,,en,isang katotohanan na madalas na nawala sa mga boss at departamento ng HR,,en,Naiintindihan kaya dahil,,en,sa oras na nabigo ang pag-alok ng negosasyon,,en,may sapat na rancor sa magkabilang panig upang maasim ang relasyon,,en,Ihiwalay ang mga nasugatan na damdamin at ngumiti sa iyong sakit,,en? If so, a counter offer is usually successful. Counter offers (both making them and taking them) are considered ineffective and in poor taste. At least, executive search firms insist that they are. But then, they would say that, wouldn’t they?

If the motivation behind the resignation is the nature of the current or future job and its challenges, a lateral movement or reassignment (possibly combined with a counter offer) can be effective. If everything fails, then it is time to bid goodbye — amicably.

It is vitally important to maintain this amicability — a fact often lost on bosses and HR departments. Understandably so because, by the time the counter offer negotiations fail, there is enough bitterness on both sides to sour the relationship. Brush those wounded feelings aside and smile through your pain, para sa iyong mga landas ay maaaring tumawid muli,,en,Maaari mong i-rehire ang parehong tao,,en,maaari mong tapusin ang nagtatrabaho sa kanya / sa kabilang panig,,en,Isalin ang anumang maliit na maaari mong para sa kapakanan ng positibong networking,,en,Ang antas ng amicability ay nakasalalay sa kultura ng korporasyon,,en,Ang ilang mga organisasyon ay napakahusay sa mga empleyado na walang awa kaya't hinihikayat nila ang paglisan,,en,Ang iba ay tinatrato ang mga traydor tulad ng dati ng hukbo,,en,sa tulong ng isang nagpapaputok na pulutong,,en,Ang parehong mga labis na paghampas na ito ay kasama ng kanilang nauugnay na peligro,,en,Kung ikaw ay masyadong cordial,,en,maaaring ituring ng iyong mga empleyado ang iyong samahan bilang isang batong hakbang,,en,nakatuon sa pagkuha lamang ng mga kakayahang maililipat,,en,Sa iba pang matindi,,en,kung nagkakaroon ka ng isang reputasyon para sa malubhang mga hadlang sa exit sa isang pagtatangka upang mapabagabag ang mga potensyal na traydor,,en,maaari mo ring mahirapan itong mag-recruit ng nangungunang talento,,en. You may rehire the same person. Or, you may end up working with him/her on the other side. Salvage whatever little you can for the sake of positive networking.

The level of amicability depends on corporate culture. Some organizations are so cordial with deserting employees that they almost encourage desertion. Others treat the traitors as the army used to — with the help of a firing squad.

Both these extremes come with their associated perils. If you are too cordial, your employees may treat your organization as a stepping stone, concentrating on acquiring only transferable skills. On the other extreme, if you develop a reputation for severe exit barriers in an attempt to discourage potential traitors, you may also find it hard to recruit top talent.

Ang tamang diskarte ay namamalagi sa isang lugar sa pagitan,,en,tulad ng karamihan sa mga magagandang bagay sa buhay,,en,Ito ay isang kulturang pangkulturang dapat gawin ng isang samahan,,en,Ngunit anuman ang nahanap ang balanse,,en,ang pagbibitiw ay narito upang manatili,,en,at ang mga tao ay magpapalit ng mga trabaho,,en,habang inilalagay ito ng labis na sobrang cliche,,en,ay ang palaging pare-pareho,,en,Ang Mundo Mundo Malayalees,,ml,Agosto,,en,Kung ang isang average na Singaporean ay nakakarinig ng World Malayalee Conference,,en,ang una nilang sasabihin,,en,Mundo ano ngayon,,en,Ang mga Malayalees ay mga tao mula sa maliit na estado ng India ng Kerala,,en,Hindi sila dapat malito sa mga Malay,,en,bagaman ang ilan sa mga bagay na nauugnay natin sa Malay,,en,tulad ng pratas at biriyani,,hi,maaaring masubaybayan pabalik sa Kerala,,en,Ang nasabing cross exchange exchange ay tumutukoy sa isang mahalagang katangian ng Malayalees,,en,May posibilidad silang mag-fan out at,,en,sa kanilang sariling maliit na paraan,,en,lupigin ang mundo,,en, like most good things in life. It is a cultural choice that an organization has to make. But regardless of where the balance is found, resignation is here to stay, and people will change jobs. Change, as the much overused cliché puts it, is the only constant.

Summing Up

In a global market that demands ever more customization and structuring, there is an unbearable amount of pull factor for good quants. Quant talent management (acquisition and retention) is almost as challenging as developing quant skills yourself.

While powerless against the pull factor, banks and financial institutions should look into eliminating hidden push factors. Develop respect and appreciation for hard-to-replace talents. Invent innovative performance measurement metrics. Introduce fair and transparent compensation schemes.

When it all fails and the talent you so long to retain leaves, handle it with tact and grace. At some point in the future, you may have to hire them. Or worse, you may want to get hired by them!

Benford and Your Taxes

Nothing is certain but death and taxes, they say. On the death front, we are making some inroads with all our medical marvels, at least in postponing it if not actually avoiding it. But when it comes to taxes, we have no defense other than a bit of creativity in our tax returns.

Let’s say Uncle Sam thinks you owe him $75k. In your honest opinion, the fair figure is about the $50k mark. So you comb through your tax deductible receipts. After countless hours of hard work, fyou bring the number down to, say, $65k. As a quant, you can estimate the probability of an IRS audit. And you can put a number (an expectation value in dollars) to the pain and suffering that can result from it.

Let’s suppose that you calculate the risk of a tax audit to be about 1% and decide that it is worth the risk to get creative in you deduction claims to the tune of $15k. You send in the tax return and sit tight, smug in the knowledge that the odds of your getting audited are fairly slim. You are in for a big surprise. You will get well and truly fooled by randomness, and IRS will almost certainly want to take a closer look at your tax return.

The calculated creativity in tax returns seldom pays off. Your calculations of expected pain and suffering are never consistent with the frequency with which IRS audits you. The probability of an audit is, in fact, much higher if you try to inflate your tax deductions. You can blame Benford for this skew in probability stacked against your favor.

Skepticism

Benford presented something very counter-intuitive in his article [1] in 1938. He asked the question: What is the distribution of the first digits in any numeric, real-life data? At first glance, the answer seems obvious. All digits should have the same probability. Why would there be a preference to any one digit in random data?

figure1
Figure 1. The frequency of occurrence of the first digits in the notional amounts of financial transactions. The purple curve is the predicted distribution. Note that the slight excesses at 1 and 5 above the purple curve are expected because people tend to choose nationals like 1/5/10/50/100 million. The excess at 8 is also expected because it is considered a lucky number in Asia.

Benford showed that the first digit in anaturally occurringnumber is much more likely to be 1 rather than any other digit. In fact, each digit has a specific probability of being in the first position. The digit 1 has the highest probability; the digit 2 is about 40% less likely to be in the first position and so on. The digit 9 has the lowest probability of all; it is about 6 times less likely to be in the first position.

When I first heard of this first digit phenomenon from a well-informed colleague, I thought it was weird. I would have naively expected to see roughly same frequency of occurrence for all digits from 1 to 9. So I collected large amount of financial data, about 65000 numbers (as many as Excel would permit), and looked at the first digit. I found Benford to be absolutely right, as shown in Figure 1.

The probability of the first digit is pretty far from uniform, as Figure 1 shows. The distribution is, in fact, logarithmic. The probability of any digit d is given by log(1 + 1 / d), which is the purple curve in Figure 1.

This skewed distribution is not an anomaly in the data that I happened to look at. It is the rule in anynaturally occurringdata. It is the Benford’s law. Benford collected a large number of naturally occurring data (including population, areas of rivers, physical constants, numbers from newspaper reports and so on) and showed that this empirical law is respected.

Simulation

As a quantitative developer, I tend to simulate things on a computer with the hope that I may be able to see patterns that will help me understand the problem. The first question to be settled in the simulation is to figure out what the probability distribution of a vague quantity likenaturally occurring numberswould be. Once I have the distribution, I can generate numbers and look at the first digits to see their frequency of occurrence.

To a mathematician or a quant, there is nothing more natural that natural logarithm. So the first candidate distribution for naturally occurring numbers is something like RV exp(RV), where RV is a uniformly distributed random variable (between zero and ten). The rationale behind this choice is an assumption that the number of digits in naturally occurring numbers is uniformly distributed between zero and an upper limit.

Indeed, you can choose other, fancier distributions for naturally occurring numbers. I tried a couple of other candidate distributions using two uniformly distributed (between zero and ten) random variables RV1 and RV2: RV1 exp(RV2) and exp(RV1+RV2). All these distributions turn out to be good guesses for naturally occurring numbers, as illustrated in Figure 2.

figure2
Figure 2. The distribution of the first digits in the simulation of “naturally occurring” numbers, compared to the prediction.

The first digits of the numbers that I generated follow Benford’s law to an uncanny degree of accuracy. Why does this happen? One good thing about computer simulation is that you can dig deeper and look at intermediate results. For instance, in our first simulation with the distribution: RV exp(RV), we can ask the question: What are the values of RV for which we get a certain first digit? The answer is shown in Figure 3a. Note that the ranges in RV that give the first digit 1 are much larger than those that give 9. About six times larger, in fact, as expected. Notice how pattern repeats itself as the simulated natural numbersroll overfrom the first digit of 9 to 1 (as an odometer tripping).

figure3a
Figure 3a. The ranges in a uniformly distributed (between 0 and 10) random variable RV that result in different first digits in RV exp(RV). Note that the first digit of 1 occurs much more frequently than the rest, as expected.

A similar trend can be seen in our fancier simulation with two random variables. The regions in their joint distributions that give rise to various first digits in RV1 exp(RV2) are shown in Figure 3b. Notice the large swathes of deep blue (corresponding to the first digit of 1) and compare their area to the red swathes (for the first digit 9).

figure3b
Figure 3b. The regions in the joint distribution of two uniformly distributed (between 0 and 10) random variables RV1 and RV2 that result in different first digits in RV1 exp(RV2).

This exercise gives me the insight I was hoping to glean from the simulation. The reason for the preponderance of smaller digits in the first position is that the distribution of naturally occurring numbers is usually a tapering one; there is usually an upper limit to the numbers, and as you get closer to the upper limit, the probably density becomes smaller and smaller. As you pass the first digit of 9 and then roll over to 1, suddenly its range becomes much bigger.

While this explanation is satisfying, the surprising fact is that it doesn’t matter how the probability of natural distributions tapers off. It is almost like the central limit theorem. Of course, this little simulation is no rigorous proof. If you are looking for a rigorous proof, you can find it in Hill’s work [3].

Fraud Detection

Although our tax evasion troubles can be attributed to Benford, the first digit phenomenon was originally described in an article by Simon Newcomb [2] in the American Journal of Mathematics in 1881. It was rediscovered by Frank Benford in 1938, to whom all the glory (or the blame, depending on which side of the fence you find yourself) went. In fact, the real culprit behind our tax woes may have been Theodore Hill. He brought the obscure law to the limelight in a series of articles in the 1990s. He even presented a statistical proof [3] for the phenomenon.

In addition to causing our personal tax troubles, Benford’s law can play a crucial role in many other fraud and irregularity checks [4]. For instance, the first digit distribution in the accounting entries of a company may reveal bouts of creativity. Employee reimbursement claims, check amounts, salary figures, grocery priceseverything is subject to Benford’s law. It can even be used to detect market manipulations because the first digits of stock prices, for instance, are supposed to follow the Benford distribution. If they don’t, we have to be wary.

Moral

figure4
Figure 4. The joint distribution of the first and second digits in a simulation, showing correlation effects.

The moral of the story is simple: Don’t get creative in your tax returns. You will get caught. You might think that you can use this Benford distribution to generate a more realistic tax deduction pattern. But this job is harder than it sounds. Although I didn’t mention it, there is a correlation between the digits. The probability of the second digit being 2, for instance, depends on what the first digit is. Look at Figure 4, which shows the correlation structure in one of my simulations.

Besides, the IRS system is likely to be far more sophisticated. For instance, they could be using an advanced data mining or pattern recognition systems such as neural networks or support vector machines. Remember that IRS has labeled data (tax returns of those who unsuccessfully tried to cheat, and those of good citizens) and they can easily train classifier programs to catch budding tax evaders. If they are not using these sophisticated pattern recognition algorithms yet, trust me, they will, after seeing this article. When it comes to taxes, randomness will always fool you because it is stacked against you.

Pero seryoso,,en,Science,,en,Malikhain,,en,Mga Libro,,en,Pranses,,en,Mga Quote,,en,Iba pang Mga Paksa,,en,Kapaligiran,,en,WordPress,,en,Mga Computer,,en,Tungkol sa,,en,Tungkol sa Unreal Blog,,en,Tungkol sa Akin,,en,CV,,en,Tungkol sa Aking Unang Aklat,,en,Tungkol sa Aking Ikalawang Aklat,,en,Tungkol sa Pagsuporta sa Akin,,en,Makipag-ugnay,,en,Advertising,,en,Propesyonal na PHP Services,,en,Paksa,,en,Blank Screen pagkatapos ng hibernate o Matulog,,en,Marso,,en,manoj,,en,Mga Komento,,en,Sige,,en,ang maikling sagot,,en,dagdagan ang iyong virtual na memorya sa higit sa laki ng iyong pisikal na memorya,,en,Mahabang bersyon ngayon,,en,Kamakailan lamang,,en,Nagkaroon ako ng problemang ito sa aking PC na hindi ito magigising mula sa hibernation o pagtulog ng maayos,,en,Ang PC mismo ay magiging at churning,,en,ngunit ang screen ay lumipat sa mode ng pag-save ng lakas,,en,manatiling blangko,,en,Ang tanging bagay na dapat gawin sa puntong iyon ay upang mai-restart ang computer,,en,Tulad ng mabuting netizen na ako,,en,I trawled ko ang Internet para sa isang solusyon,,en,Ngunit wala namang nakahanap,,en,Ang ilang mga iminungkahing i-upgrade ang BIOS,,en, Benford’s law is a tool that we have to be aware of. It may come to our aid in unexpected ways when we find ourselves doubting the authenticity of all kinds of numeric data. A check based on the law is easy to implement and hard to circumvent. It is simple and fairly universal. So, let’s not try to beat Benford; let’s join him instead.

References
[1] Benford, F. “The Law of Anomalous Numbers.Proc. Amer. Phil. Soc. 78, 551-572, 1938.
[2] Newcomb, S. “Note on the Frequency of the Use of Digits in Natural Numbers.Amer. J. Math. 4, 39-40, 1881.
[3] Hill, T. P. “A Statistical Derivation of the Significant-Digit Law.Stat. Sci. 10, 354-363, 1996.
[4] Nigrini, M. “I’ve Got Your Number.J. Accountancy 187, pp. 79-83, May 1999. http://www.aicpa.org/pubs/jofa/may1999/nigrini.htm.

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Quant Life in Singapore

Singapore is a tiny city-state. Despite its diminutive size, Singapore has considerable financial muscle. It has been rated the fourth most active foreign exchange trading hub, and a major wealth management center in Asia, with funds amounting to almost half a trillion dollars, according to the Monitory Authority of Singapore. This mighty financial clout has its origins in a particularly pro-business atmosphere, world class (well, better than world class, in fact) infrastructure, and the highly skilled, cosmopolitan workforce–all of which Singapore is rightfully proud of.

Among the highly skilled workforce are scattered a hundred or so typically timid and self-effacing souls with bulging foreheads and dreamy eyes behind thick glasses. They are the Singaporean quants, and this short article is their story.

Quants command enormous respect for their intellectual prowess and mathematical knowledge. With flattering epithets like “rocket scientists” or simply “the brain,” quants silently go about their jobs of validating pricing models, writing C++ programs and developing complicated spreadsheet solutions.

But knowledge is a tricky thing to have in Asia. If you are known for your expertise, it can backfire on you at times. Unless you are careful, others will take advantage of your expertise and dump their responsibilities on you. You may not mind it as long as they respect your expertise. But, they often hog the credit for your work and present their ability to evade work as people management skills. And people managers (who may not actually know much) do get better compensated. This paradox is a fact of quant life in Singapore. The admiration that quants enjoy does not always translate to riches here.

This disparity in compensation may be okay. Quants are not terribly interested in money for one logical reason–in order to make a lot of it, you have to work long hours. And if you work long hours, when do you get to spend the money? What does it profit a man to amass all the wealth in the world if he doesn’t have the time to spend it?

Besides, quants seem to play by a different set of rules. They are typically perfectionist by nature. At least, I am, when it comes to certain aspects of work. I remember once when I was writing my PhD thesis, I started the day at around nine in the morning and worked all the way past midnight with no break. No breakfast, lunch or dinner. I wasn’t doing ground-breaking research on that particular day, just trying to get a set of numbers (branching ratios, as they were called) and their associated errors consistent. Looking back at it now, I can see that one day of starvation was too steep a price to pay for the consistency.

Similar bouts of perfectionism might grip some of us from time to time, forcing us to invest inordinate amounts of work for incremental improvements, and propelling us to higher levels of glory. The frustrating thing from the quants’ perspective is when the glory gets hogged by a middle-level people manager. It does happen, time and again. The quants are then left with little more than their flattering epithets.

I’m not painting all people managers with the same unkindly stroke; not all of them have been seduced by the dark side of the force. But I know some of them who actively hone their ignorance as a weapon. They plead ignorance to pass their work on to other unsuspecting worker bees, including quants.

The best thing a quant can hope for is a fair compensation for his hard work. Money may not be important in and of itself, but what it says about you and your station in the corporate pecking order may be of interest. Empty epithets are cheap, but it when it comes to showing real appreciation, hard cash is what matters, especially in our line of work.

Besides, corporate appreciation breeds confidence and a sense of self-worth. I feel that confidence is lacking among Singaporean quants. Some of them are really among the cleverest people I have met. And I have traveled far and wide and met some very clever people indeed. (Once I was in a CERN elevator with two Nobel laureates, as I will never tire of mentioning.)

This lack of confidence, and not lack of expertise or intelligence, is the root cause behind the dearth of quality work coming out of Singapore. We seem to keep ourselves happy with fairly mundane and routine tasks of implementing models developed by superior intelligences and validating the results.

Why not take a chance and dare to be wrong? I do it all the time. For instance, I think that there is something wrong with a Basel II recipe and I am going to write an article about it. I have published a physics article in a well-respected physics journal implying, among other things, that Einstein himself may have been slightly off the mark! See for yourself at http://TheUnrealUniverse.com.

Asian quants are the ones closest to the Asian market. For structures and products specifically tailored to this market, how come we don’t develop our own pricing models? Why do we wait for the Mertons and Hulls of the world?

In our defense, may be some of the confident ones that do develop pricing models may move out of Asia. The CDO guru David Li is a case in point. But, on the whole, the intellectual contribution to modern quantitative finance looks disproportionately lopsided in favor of the West. This may change in the near future, when the brain banks in India and China open up and smell blood in this niche field of ours.

Another quality that is missing among us Singaporean parishioners is an appreciation of the big picture. Clichés like the “Big Picture” and the “Value Chain” have been overused by the afore-mentioned middle-level people managers on techies (a category of dubious distinction into which we quants also fall, to our constant chagrin) to devastating effect. Such phrases have rained terror on techies and quants and relegated them to demoralizing assignments with challenges far below their intellectual potential.

May be it is a sign of my underestimating the power of the dark side, but I feel that the big picture is something we have to pay attention to. Quants in Singapore seem to do what they are asked to do. They do it well, but they do it without questioning. We should be more aware of the implications of our work. If we recommend Monte Carlo as the pricing model for a certain option, will the risk oversight manager be in a pickle because his VaR report takes too long to run? If we suggest capping methods to renormalize divergent sensitivities of certain products due to discontinuities in their payoff functions, how will we affect the regulatory capital charges? Will our financial institute stay compliant? Quants may not be expected to know all these interconnected issues. But an awareness of such connections may add value (gasp, another managerial phrase!) to our office in the organization.

For all these reasons, we in Singapore end up importing talent. This practice opens up another can of polemic worms. Are they compensated a bit too fairly? Do we get blinded by their impressive labels, while losing sight of their real level of talent? How does the generous compensation scheme for the foreign talents affect the local talents?

But these issues may be transitory. The Indians and Chinese are waking up, not just in terms of their economies, but also by unleashing their tremendous talent pool in an increasingly globalizing labor market. They (or should I say we?) will force a rethinking of what we mean when we say talent. The trickle of talent we see now is only the tip of the iceberg. Here is an illustration of what is in store, from a BBC report citing the Royal Society of Chemistry.

China Test
National test set by Chinese education authorities for pre-entry students As shown in the figure, in square prism ABCD-A_1B_1C_1D_1,AB=AD=2, DC=2\sqrt(3), A1=\sqrt(3), AD\perp DC, AC\perp BD, and foot of perpendicular is E,

  1. Prove: BD\perp A_1C
  2. Determine the angle between the two planes A_1BD and BC_1D
  3. Determine the angle formed by lines AD and BC_1 which are in different planes.
UK Test
Diagnostic test set by an English university for first year students In diagram (not drawn to scale), angle ABC is a right angle, AB = 3m BC = 4m

  1. What is the length AC?
  2. What is the area of triangle ABC (above)?
  3. What is the tan of the angle ABC (above) as a fraction?

The end result of such demanding pre-selection criteria is beginning to show in the quality of the research papers coming out of the selected ones, both in China and India. This talent show is not limited to fundamental research; applied fields, including our niche of quantitative finance, are also getting a fair dose of this oriental medicine.

Singapore will only benefit from this regional infusion of talent. Our young nation has an equally young (professionally, that is) quant team. We will have to improve our skills and knowledge. And we will need to be more vocal and assertive before the world notices us and acknowledges us. We will get there. After all, we are from Singapore–an Asian tiger used to beating the odds.

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