Wall Street Story: From Fat Quant to Fit Nerd, Part 1

Luis

I love America. It’s my adopted homeland, and I have lived here more than half my life in a great city, in a great country. I went through a lot to earn my citizenship, and every day I feel lucky that I did.

It is because of this that I can say: our nation is headed in the wrong direction in many areas: health, social issues, foreign policy, to name a few broad areas.

On the health side, one of the things that worries me is the alarming increase in obesity we’ve witnessed, especially in the last few years. Fortunately, initiatives like First Lady Michelle Obama’s Let’s Move are steps in the right direction to help reverse the trend. But we need more. I’m not saying these things to depress anyone; I’m saying them because these realizations shocked me into action. They were the trigger that shot me into the next phase of my life. Believe me, I know about obesity. I became sensitive to this subject in September 2008. Back then I was working for Lehman Brothers; some say ‘ground zero’ of the financial crisis. After Lehman’s collapse, I took a long, hard look at myself in the mirror. I saw a 43-year-old, depressed, obese Wall Street executive who had specialized in an area of  finance that was taking a lot of heat. But I also saw my inner Quant.

Quants are, essentially, data scientists with a lot of time series analysis and financial backgrounds. Quants are problem solvers, and at that point I had two big problems: 1) The credit crisis and the job implications for me and thousands of other people, and 2) the gradual deterioration of my health due to my obesity & work related stress. There was nothing I could do about problem 1 for the time being, but about problem 2, the quant/data scientist in the mirror looked back at me and said “You can solve this!” Let me stop right now to tell you that if you’re looking for a quick fix to lose weight fast, then you might as well move on to another site, because my story is not for you. If, on the other hand, you’re looking for unique knowledge to empower you to accomplish your fitness goals, to look at things in new ways, to learn how to find hope in adversity, this and future posts might be just the thing.

Back to the story: I was a fat quant looking for a rational method of getting in shape, and in line with my quant mentality. A good quant knows that asking the right question brings you halfway to the answer. So, in 2008 I googled “How to get in shape under a rational approach”. For that type of very specific search, I got no significant results, but thousands of “Lose Weight Fast!”, “Get a Six Pack in Two Weeks” and things like that. So I committed to researching the topic, developing a scientific and unbiased analysis, and using the findings on myself in real time.

First, a little about my view of how data works. Numbers don’t lie. And if you use bad data, and/or somehow fudge the results of data, I can tell you that things will go wrong. Depending on the system, one or two errors can be tolerated without major interruptions. However, once errors build up to a critical point in any system, they will reach a tipping point where the system will likely collapse like a house of cards. This will almost always lead to a worst-case scenario. Without a dissipation mechanism, cumulative errors will correct themselves by bringing the whole system from one side to the other, wreaking havoc in the process,  just as a pendulum swings from one extreme to the other trying to find balance. That sort of “havoc” can kill you, impair economies, and even create social unrest, like the cases of Egypt and Libya, and who knows what might happen to this country with the high unemployment rates we are experiencing (and my data shows that the unemployment momentum & dissatisfaction is growing, so I predict some “unrest” down the road, as I hope to explain in a later blog).

Examples of things that get out of whack could be years of bad eating and drinking habits leading to a massive heart attack; securitizing sub-prime mortgages without proper due diligence on the mortgages or the analytical methods used to rate them, or selling bonds backed by movie receivables without doing the homework to understand the basic Hollywood equation. Or diets that make you lose weight fast by making you lose more muscle mass than fat, only to gain all the weight back and more a few months down the road, and with serious damage to your metabolism.

I have firsthand experience with cumulative errors, having witnessed the phenomenon in action on Wall Street. At a more Main Street level, I’ve experienced accumulated errors in my own health: years of bad eating and lack of exercise had gradually deteriorated my health, led to early symptoms of metabolic syndrome and potentially decreased my life expectancy.

As a good Quant, I am obsessed with data, and had been manually collecting certain types of data since 1987 for whatever analysis I was into. Since then, I’ve been collecting and storing data first in written form, then on 5 1/4-inch disks, 3 1/2-inch floppys, magnetic tapes, zip disks, CDs, DVDs, hard drives, you name it. In 1990 I got my first email and Unix (the granddaddy of Linux) account and that year started to add some rudimentary types of online data collection to my offline data collection. But first I had to tweak certain tools, or develop my own, since Mosaic (the first browser) had not even been invented yet, and I had to use Gopher, IRC and FTP to collect data.

I keep my most interesting data in relational databases. Once I have it there, I can create all kinds of interesting relationships among data items for further analysis and insight. Right now, post-Wall Street credit crunch, the most powerful visual analysis of data is the one I am just discovering by interfacing my databases with code written in Python. I never knew that getting in shape could be quantified and optimized – two of my favorite things, and the basis of this Quantitative Method blog.

I hope I can pass some of my experience of getting in shape along to you and help make a difference in your life. ‘Creating to share’ is a fascinating, rewarding concept that Silicon Valley knows very well. In future posts, I’ll write more about the specific techniques I used, and how you might be able to use them too. I’ll also code some fun Python snippets to illustrate the concepts presented in my blogs. But it’s important to me to tell the backstory of my approach. I did this because I wanted to keep my problem-solving skills honed and find applications outside finance, and to prove, at least to myself, that I’m still creative at what I do.   Now when I look in the mirror, I am 95.4% satisfied with my transformation “From Fat to Fit”, but still experimenting to reach a 99.6% level of satisfaction.

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2 Comments

  1. you wrote on my fb page AGE IS NOT A FACTOR! but i think as we age our metabolism slows down so much that its harder to get back into shape the longer you ” let it go”, put on a few, get winter chub etc. it’s harder to bounce back, no?

    1. You are right Lisa. Age is a limiting factor, but if you know what you are doing, you can minimize the impact of natural aging. One of the main problems with aging and fitness is the loss of muscle mass, as our metabolism slows down. Fat is “cheaper” to maintain (in terms of energy requirement) than lean muscle mass, so the body seeks the path of least resistance as in any other physical phenomena, and that’s why we tend to gain fat as we age.
      Now, if we intentionally manipulate our diets and choose exercises carefully (some exercises are sub-optimal because they don’t involve as many muscle fibers as others), we can stimulate muscle growth and “artificially” slow down the aging process.
      That’s exactly what I did, and to get to that point, I had to do a lot of analytical work and, fortunately, I had been accumulating data about my own bodyweight & body-fat since 1987. Once I acquired some knowledge of energy processes in the body such as cell oxidation, metabolism, nutrition, caloric density of foods, etc., and started to correlate my own weight gain with periods where I had done popular diets, then a picture started to emerge. What I have now is not a diet, but a lifestyle change, and I eat almost whatever I want, within certain parameters.
      And now, in addition to a carefully monitored nutrition (one size DOES not fit all), I take a few key antioxidants and other supplements that aside from helping me maintain and even gain muscle mass, they also seem to be slowing down a few indicators of aging.
      Cheers

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