Hurry Up and Wait

3 thoughts on speed, math and waiting

First, Felix Baumgartner goes 834 mph in a free fall and has to make a split second decision to either trust his team's math or have his blood come centrifuging out his eyes. He opts for the former and we are all amazed.

Second. Frank Partnoy's new book Wait examines the science behind delay. Traders should enjoy the chapter on HFT. A west coast hedge fund saw significant performance reduction after an expensive investment in co-location and speed  to get execution faster than 65 milliseconds. The head of the firm ordered the speeds back down and the performance returned.

Third. An obtuse calculation for rain delayed cricket matches is used in the LIBOR set reconstruction for term structures. The Duckworth/Lewis formula (http://www.duckworth-lewis.com/) is utilized for terms where insufficient information occurs. Math for math's sake.

Felix said it best, " When you're that high and going that fast, the only thing you think about is getting back down." Life and trading are all about time frames. In a culture where trading is "Fast" and "Mad", we find ourselves  slowing down, taking our time with choices and trusting some simple math to help us out.

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