Fischer Black was a workaholic at Goldman Sachs. Given that he was rarely seen outside of his office. In fact he had his office made sound proof so that he could not hear what was happening among the traders outside of his office. Fischer would spend hours on his computer typing notes and solving problems. He was tied to his computer and many times when he was on the phone or in an interview he would continue to type.
Fischer's job as the head of Quantitative Strategies required him to find ways for Goldman Sachs to make larger returns by market trading. Goldman Sachs quantitative trading strategies fell into two categories; technical and fundamental. Technical strategies focused on trends and patterns and fundamental strategies focused on company research that found under priced stocks. Both of these strategies Fischer thought created noise that traders became distracted by. Fischer worked to eliminate this noise by removing any books that contained that kind of information. He wanted traders to trade on skill and not luck.
In his work at Goldman Sachs he also noticed that the model that he had developed (The Black-Scholes model) had also created noise in the trading market. He noticed that using the model that options with low exercise prices were undervalued and higher priced options were overvalued and that the market was following the Black-Scholes model. To Fischer this provided an opportunity for higher returns. He taught his traders how the model could be used to analyze problems and make decisions.
A for Hoyt.
ReplyDeleteI think we throw the term workaholic around a little too lightly. Yes, Black's worklife interfered with his home and personal life. But, does that make him a workaholic? You need to ask yourself what you would do if you were that talented? Is it detrimental to society if you don't work a lot? Which is more important?