It is true that the stakes are higher when you are dealing with money management, so people who call for more regulation and scrutiny of WS do make a lot of sense. But, I still stand by my opinion that the practice is pretty prevalent in all industries and merely a symptom of a competitive capitalist society. At some level, your product or service is not 100% in the best interest of your customer, whether it is about the best fit for the customer, price or a potential alternative. I am not making a moral judgment call on it, it just what I have noticed.
I totally disagree with your second point, however. Banks are providing many services that are valuable to their clients. For example, they help companies and institutions raise cheap funding (usually tailored to the wants of the company and the investors), allow liquidity for investors to offload unwanted investments, provide advice on takeover, acquisition and restructurings, help with the price discovery process, invest directly in companies through VC and PE firms etc. If they provide nothing of value, why does the economy suffer so much when the banks are unhealthy?
The "gambling" aspect is really a byproduct of the fact that no one can predict the future in markets - just like a project manager usually needs to guess on which project to invest the company's resources in. Business is always about intelligent gambling and hustling no matter where you are. I feel like many engineers don't understand this because they often believe that success is only directly dependent on "building something of value" whereas in reality it is often due to good marketing and a fair amount of luck.
I agree with your third point (and is why I am a software guy) although I was making point about WS providing a valuable service too and not doing comparisons between raw innovation in the industries. Although to be fair the financial space is much more limited and regulated than the software and hardware space is, so it is not surprising that SV is more innovative. Moreover, WS has a been a big player in terms pushing the envelope of high performance and concurrent systems, artificial intelligence/pattern matching/forecasting algorithms and other cool technology; whereas, many SV "innovations" recently have been yet another photo sharing app and look at this old program that has been ported to the browser. That being said, the open-source developer community is definitely something that is amazing and unique to SV.
I cringed when I read this headline on HN because I too worked for Lehman between 2006 and 2008. I felt the same way Nick did even around the same time (wanting to go back to making "real things"). However, lately I feel like I have come back somewhat full-circle. Many of the issues he complains about is rampant in almost of every industry.
For example, Groupon was basically taking advantage of unsophisticated small businesses. How much brain power in SV is devoted to tricking people to click on ads, "covert users" or become addicted to Zynga-style games? How many things are sold only because that company has the strongest name-brand even though better versions exist? Could you have sold the product for less than the customer paid and still make a profit?
You are almost always taking advantage of a customer in some ways but still providing a service or product that the customer ultimately wants. WS is just easy to pick on because they are the most blatant about this practice while at the same time protected by the government.
volatility is the de facto measure of risk for a portfolio/trading strategy (there are more measures but vol is common). People tend to measure performance on a risk-adjusted basis (for example the Sharpe or Information Ratio) because in an ideal world an investor could theoretically lever/delever a portfolio to a level of risk they are comfortable with. All things being equal a higher Sharpe ratio would give you more returns for the same amount of risk as a portfolio with a lower Sharpe ratio.
Great work Dan, it is totally what I would be looking for when backtesting and strategy development. Do you mind sharing what js framework you used on the client side?