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met yuen Australian Financial Review In the kitchen of digital asset group Trovio’s Sydney office on a quiet Wednesday morning in January.
In her pursuit of all things interesting, complex and different, she seems to enjoy the extreme volatility of cryptocurrencies and the new and wild frontiers of capital markets.
Quant Quest
“This is a whole new universe with new metrics,” she said of cryptocurrencies, admitting that the absurdity of meme coins such as Doge and Shiba initially puzzled her.
“It’s important not to spend money on something that’s dying or just a fad,” she says.
Yuen is gearing up for another year of trying to get on the bucking bronco of digital assets, so little seems to surprise her. She’s seen it all in a career journey that has taken her to San Francisco and New York, with detours to Cambridge and Paris.
Yuen’s BA in Physics and Engineering was motivated by a desire to understand how things work. Engineers were in high demand in Silicon Valley at the time, so she headed to the US to work at a startup.
But while she enjoyed her job as an engineer, the job wasn’t all that interesting.
So she set off to pursue a PhD at the 580-year-old King’s College, Cambridge. Her interest in finance grew when she read how the endowment fund lost money in the 1998 Southeast Asian crisis and wondered if she could apply herself to prevent such a situation. thought.
Her doctoral dissertation was about examining financial data using an “interesting tool”: applying fractal analysis to analyze the intraday price movements of US stocks.
Goldman Sachs was the only logical place to go to learn more about finance.
She said the bank tended to collect PhDs in a variety of fields, so it seemed like a natural fit.
Yuen landed at the multi-asset prop desk at the Bank of the United States. She used her quantitative skills to build tools to analyze unusual mixes of bank-purchased assets, from airplanes to satellites to credit in her card portfolio.
But life in New York became more difficult after the global financial crisis that threatened Goldman’s solvency and fired Yuen’s friends. The cold winter made her homesick, so she quit her company and told her boss that she was going back to her sunny Australia to open a patisserie.
“I spent years doing things like math and science. I wanted to do something creative and fun,” she said.
She went to Paris to study to become a pastry chef. She describes her experience as “intense.”
Yuen never opened that patisserie – commercial rents in Sydney weren’t too economical – but she set up a business making furniture covers.
“I’m glad my products are in stores in America,” she said, adding, “Selling is really, really hard.”
But at some point, she decided “it was time to make it real”, so she sought a job in finance and rediscovered her passion for quantitative analysis, which is fashionable again.
“With new buzzwords like machine learning and data science, everything has progressed and become beautiful.”
crazy coin
Back in the financial field, she stumbled upon Australian credit fund Coolabah Capital and wealth consultancy Lonsec before landing on Pendal as part of the quantitative analysis team.
Yuen has since followed Pendal’s Vimal Gor to Trovio where he is now a portfolio manager for a digital asset fund. It’s safe to say that analyzing and trading cryptocurrencies didn’t seem like her destiny.
She says she first heard about Bitcoin in 2010 from her roommate, but it sounded like a gimmick. Another friend told her how she was talking to the European Central Bank about blockchain.
If that wasn’t enough of a signal to join, there were bus ads.
“I should have listened to them. But here I am now,” she says.
Needless to say, trading cryptocurrencies is a different ballgame than traditional financial markets. Stocks tend to go up and down stairs like the saying goes. In other words, prices tend to rise gradually and then fall suddenly, whereas crypto assets do not tend to trade in a straight line.
Obvious network effects mean that the values attributed to them are more asymmetric, so they can rise quickly, but they can also fall quickly.
So is this the ultimate application of technical analysis?
“I wouldn’t call it purely technical. Some of it is behavioral, observing what people are doing,” she says.
Cryptography is also the new frontier of data analysis with limited data sets from various sources.
Few people find data analysis attractive, but those of us who do it should be careful. A lot of time and effort is spent cleaning data from various and sometimes unreliable sources before analyzing it.
sifting of garbage
“It’s a hassle, but you have to do it. If the data is input and garbage, output is garbage,” she says.
Sifting through the trash is especially important in cryptocurrencies, where all sorts of weird, bizarre and questionable coins pour into exchanges.
“The craziest stuff we left out. We have an algorithm that selects what we think is more interesting, and we analyze it to see where the value is coming from and if there are network effects in the future. ”
Of course, in 2022 scary tree rings for crypto assets. The implosion of the Terra stablecoin, which usurped various participants in the cryptocurrency market, seems like a distant memory after former cryptocurrency prince Sam Bankman-Fried’s FTX empire unraveled.
The pain of the cryptocurrency plunge has been felt by top venture capital funds to speculators young and old. But Yuen sees a silver lining in last year’s events.
“This means bad players are being drawn out, which is a good thing.”
“When regulators finally move in and sort it out, there will be an influx of institutional money. That’s how we see it.”
She believes that digital assets and blockchain technology are in their infancy.
“It’s actually really fundamentally helpful. Somehow it will spread and make things better.”
Efficiency wins, she says, is how the world works. But if Yuen had to summarize what he learned on this trip, it’s this:
“The market is constantly changing and the world is changing rapidly. You need to be able to adapt, learn and try new things.”
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