Hedge funds have armies of PhDs, Bloomberg terminals, and million-dollar data feeds. I have Python open in VS Code - and a PhD in political economy. How much can I reproduce on my laptop?
On that centralbanktalk project, could you use to game out the effects of a Pablo Hernandez De Cos as the successor of Lagarde versus Klaas Knot (or others)? I mean in terms of their 'talk' so far in their careers? de Cos is said to be Draghi 2.0 but Lagarde seems to prefer Knot. I'm thinking not so much in terms of their macroeconomic stance but specifically the public and markets facing part of the ECB President role and also the internal agenda setting. You might have talked about this in your paper.
It's become a minor obsession to think about this, what with all the changes to ECB & Fed happening next 2y
Sorry to hijack comments on quant trading model with centralbanktalk but didn't know about it until this post
That's a cool use case - trying to predict the ECB president based on their speeches. The only problem I see is that the ECB president role is often more complicated and dependent very much on the overall EU context (e.g., Lagarde was a package deal agreement in which nationalities certainly play a role). Still cool to see if there is something systematic about the different ways different positions talk!
Sorry, one more thing. I should say that my bigger overall interest in the interaction between NCBs and ECB president and the way ECB is run is the role that plays in getting Draghi & Letta reports' recommendations to life. Sure, lots of that depends on politicians but there's about 25% of that where a better coalition builder and better whisperer for NCBs agendas might achieve more.
I was thinking even less than predict more to pre-emptively model how would a de Cos presidency play out vs a Knot one. All ECB positions (including the presidency) are highly political appointments so it's hard to predict.
But 4 of the 6 positions on ECB Executive Board are coming up before end 2027 (including Pres and vice-president).
Then there's a few NCB from the Governing Council that have recently changed (Slovakia, Netherlands, Portugal, Finland, Austria, Malta), two that have active governors pending permanent appointments (Slovenia, Latvia), four that are due replacement in 2026 (Lithuania, Estonia, Greece, Ireland) and then 5 big ones that are due to change after 2027 but will matter for Lagarde successor (France, Belgium, Italy, Spain, Germany).
Feels like from your paper's POV and looking at de Cos's background he is the better fit, he would be better of getting the signal from the NCB agendas and brokering coalitions.
Lagarde has a lot good in her record but her communication/expectation management, coalition building wasn't the best.
Basically feel like a de Cos presidency could potentially be like empirically proving your papers' thesis.
What really strikes me is how this reinforces that successful quant trading isn't just about having a clever algorithm—it's an industrial-scale operation requiring institutional-grade data feeds, co-location servers, and teams of PhDs constantly refining models. Even if you could replicate the strategy logic, you'd be executing it orders of magnitude slower and paying dramatically higher transaction costs per trade. The retail loss statistics you mentioned aren't just about strategy failure; they're often about structural disadvantages that no amount of individual skill can overcome. It's like trying to compete in Formula 1 with a street car—even the best driver can't bridge that gap.
I completely agree! One thing I also might have underplayed in a bit in the Substack is the connections within a certain industry and closeness to legislators which some more specialized investment firms certainly get an edge from too!
This is such a fasinating look behind the curtain of quant trading. The gap between what hedge funds have access to and what an individual can replicate is mind boggling. Your experiment really highlights how much edge comes from resources and infrastructure rather than just strategy. The disclamer about 77% of retail traders losing money is a sobering reminder that this world isn't as accessable as some people think.
I completely agree! I did underplay besides data the role of personal connections which could also give an edge. Fun fact: the platform used to make bets on the market: https://www.plus500.com/en-it/ has a disclaimer about this, while the US version doesn't https://www.plus500.com/en-us/
On that centralbanktalk project, could you use to game out the effects of a Pablo Hernandez De Cos as the successor of Lagarde versus Klaas Knot (or others)? I mean in terms of their 'talk' so far in their careers? de Cos is said to be Draghi 2.0 but Lagarde seems to prefer Knot. I'm thinking not so much in terms of their macroeconomic stance but specifically the public and markets facing part of the ECB President role and also the internal agenda setting. You might have talked about this in your paper.
It's become a minor obsession to think about this, what with all the changes to ECB & Fed happening next 2y
Sorry to hijack comments on quant trading model with centralbanktalk but didn't know about it until this post
That's a cool use case - trying to predict the ECB president based on their speeches. The only problem I see is that the ECB president role is often more complicated and dependent very much on the overall EU context (e.g., Lagarde was a package deal agreement in which nationalities certainly play a role). Still cool to see if there is something systematic about the different ways different positions talk!
Sorry, one more thing. I should say that my bigger overall interest in the interaction between NCBs and ECB president and the way ECB is run is the role that plays in getting Draghi & Letta reports' recommendations to life. Sure, lots of that depends on politicians but there's about 25% of that where a better coalition builder and better whisperer for NCBs agendas might achieve more.
I was thinking even less than predict more to pre-emptively model how would a de Cos presidency play out vs a Knot one. All ECB positions (including the presidency) are highly political appointments so it's hard to predict.
But 4 of the 6 positions on ECB Executive Board are coming up before end 2027 (including Pres and vice-president).
Then there's a few NCB from the Governing Council that have recently changed (Slovakia, Netherlands, Portugal, Finland, Austria, Malta), two that have active governors pending permanent appointments (Slovenia, Latvia), four that are due replacement in 2026 (Lithuania, Estonia, Greece, Ireland) and then 5 big ones that are due to change after 2027 but will matter for Lagarde successor (France, Belgium, Italy, Spain, Germany).
Feels like from your paper's POV and looking at de Cos's background he is the better fit, he would be better of getting the signal from the NCB agendas and brokering coalitions.
Lagarde has a lot good in her record but her communication/expectation management, coalition building wasn't the best.
Basically feel like a de Cos presidency could potentially be like empirically proving your papers' thesis.
What really strikes me is how this reinforces that successful quant trading isn't just about having a clever algorithm—it's an industrial-scale operation requiring institutional-grade data feeds, co-location servers, and teams of PhDs constantly refining models. Even if you could replicate the strategy logic, you'd be executing it orders of magnitude slower and paying dramatically higher transaction costs per trade. The retail loss statistics you mentioned aren't just about strategy failure; they're often about structural disadvantages that no amount of individual skill can overcome. It's like trying to compete in Formula 1 with a street car—even the best driver can't bridge that gap.
I completely agree! One thing I also might have underplayed in a bit in the Substack is the connections within a certain industry and closeness to legislators which some more specialized investment firms certainly get an edge from too!
This is such a fasinating look behind the curtain of quant trading. The gap between what hedge funds have access to and what an individual can replicate is mind boggling. Your experiment really highlights how much edge comes from resources and infrastructure rather than just strategy. The disclamer about 77% of retail traders losing money is a sobering reminder that this world isn't as accessable as some people think.
I completely agree! I did underplay besides data the role of personal connections which could also give an edge. Fun fact: the platform used to make bets on the market: https://www.plus500.com/en-it/ has a disclaimer about this, while the US version doesn't https://www.plus500.com/en-us/