Revenge of the nerds - quants move to the front office

quant approach is just a formalization of a manager's belief - baking it in code, telling the manager really what he expects to see. quants (even "Portfolio Managers") in our firm has no freedom whatsoever in what model to build, what factor to use to generate alpha...etc. They are told exactly what to build by the top dog.
And, really, these guys are just complete nerds and really this is not a compliment.
quants problem is, they really over complicate trading process with mathematics which don't matter. This obscure real insight, this also slow down investment process

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agree with Warren Buffer..

Quote Steve99
"the whole market predicted the credit crunch, they just didnt know when"

Really??

Your comment illustrates you know absolutely nothing about finance..if everone knew about the credit crunch, then would everyone would still hold their ABS CDO bonds backed by US subprime before it collapsed? Your arguement completely contradicts itself and you probably don't even know why. So let me answer my own rhetorical question: a situation where the market knew what they were holding, will drop by more than 50% but does not actively reprice the security, does not exist. Therefore the situation was that most people in the market did not know about the credit crunch and more specifically, quant models cannot even assign a probability to such an event and therefore by design excludes such possibility.

Please get yourself a bit more educated on finance before making sweeping statements "this is total rubbish". I'm embarassed for you.

Let's cut the nonsense and here is a definitive argument.
Jim Rosenberg, John Meriwhether, Nobel Laureates Myron Scholes, Bob Merton, plus PhD's in maths and physics from Stanford etc. etc. A whole bunch of traders who decided their models were so good, they were infalliable. Russian bond crisis, everyone sold, their models said buy, they bought (what better time to buy?) couple of mths later, kaput, the entire fund went bust. So much for quantitative talent....if quants are know alls why did their models fail? Note these aren't idiots, they are very smart people, so you can't blame the practitioners, you have to agree the practioners trade was flawed to begin with.

Seocond argument: Warren Buffet has always ridiculed quants as not having any real understanding of the (economic) environment in which they are plying their trade. "Trading" by its very definition is nothing more than disguised 'gambling', calculated guesswork nothing more. 'Investing' is what Buffet did....he never used any PhD's in maths and physics, no complicated quant models, just simple good ole common sense.

I rest my case.

@fund99: this is total bullshit. I am sure many of your PMs have predicted the credit crunch - the whole market predicted a credit crunch, just nobody knew when.

The typical mindset of a trader / PM is a mean reverting process in the long term (if it's down it's gonna go up sometime) and a linear trend in the short term (it's gone down for such a long term, this trend must hold just a little longer). Two absolutely trivial models, which can be much approved upon.

The disadvatage of models - I admit - is that they cannot talk themselved out of it when they are wrong and justify their actions in hindsight and put the blame on everyone else.