That's the future which Cohen is experimenting with at Point72 Asset Management in Stamford, Connecticut. And, like JPMorgan's COIN, it could eliminate high-value jobs in the lucrative world of finance.
This is occurring after Point72 only generated a 1% gain in 2016. Cutting out the usual number of traders who can earn big bonuses can improve profits for investors and lower fees.
The umbrella term "Wall Street," as we know it, could come to designate a highly specialized niche in tech. And that would be the end of that story. Here are the details from Bloomberg about the scenario for the future which should scare those in finance and cheer investors.
Already outplacement centers near financial firms are filled with long-time experts who have gotten the boot as the industry struggles to become more cost-efficient. As one outplacement coach put it, "They have no where to go unless one of their clients hires them."
The career path of the best and brightest in MBA degrees might no longer go to Wall Street. But hunker down in computer science.
Automating trades would consists of feeding in data which would interact with each other. That would create models. That data would include:
- Size of positions
- Level of risk and leverage
- If investment had been hedged
- Environment of trades
The data about how a superlawyer such as David Boies of Boies Schilller achieved the results the client wanted could be identified and programmed. All the key variables would be accounted for. That would cover such factors as the mindset of a particular decision-maker such as a judge or a regulatory official. It was Boies who essentially got Cohen off the hook with the SEC.
The brand equity of a law firm could be calculated by the brilliance of the models developed. There would be star teams: The experienced lawyer + the programming wizard.
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