The quant research hygiene tip that could prevent you burning out at 30

In quant research, even the best can’t get everything right. The mark of a great quant is not just modelling aptitude, but how you react to such failure. In a talk with Bank of America, ex-Citadel, Millennium and Hudson River Trading quant Giuseppe Paleologo suggested it's best not to let it get to your head

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“When people get terrible results, they tend to eventually either abandon the field, or ignore them,” Paleologo said. He’s previously advised students not to go into alpha-generating roles at all if they’re not truly exceptional at them, stating “the road to hell is paved with mediocre alpha researchers who did not achieve their goals and burned out by their early 30s."

If you are one such mediocre alpha researcher (or ‘just going through a rough patch’) ignoring those subpar signals seems to be the best option; in the long run, they may come good anyway. “One of the basic rules of hygiene is ‘never throw out a signal,'” said Paleologo. “Always keep them in your system and update whatever signals you have been generating.”

Paleologo said forgetting a signal essentially means “you’re hiding the complexity of your surviving strategies,” which can be an issue when multiple testing. There’s also the possibility that, when you hang onto them, “signals that don’t work, work again… so it makes a lot of sense to keep everything alive.”

Ultimately, the more data you have, the better, which is why the major firms always perform better than others in the long term. He says that the top firms right now have “easily 15, 20 million signals.” In the future, he sees the gap widening, and those firms “easily run[ning] in the hundreds of millions or billions of signals.” 

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