The choice of language

You may notice that I used hella slang and vulgar language in my blogs. My intention is not to encourage you to talk to your client or boss like that. Rather, I’d like you to learn technical things in a fun and less serious way.

I bet you have experiences like this: you jump into a new field and you see many terms that you know of, but when they are strung together, they make no goddamn sense

For example, you are new to the desk and you read this:

Morgan Stanley reported the 1-day value at risk of a portfolio is $5M using a 99% Confidence Interval

• Ok, Morgan Stanley, I get it.
• Value at risk, hmm, I will google it really quick. But according to the definition, emmmmm… HUH ???
• Portfolio, suppose it’s a bag of assets
• Confidence Interval? I learned this in stats class but I totally forgot what it means.

Altogether, this sentence doesn’t make any sense to you. This is exactly what it feels like when you take SAT.

Unfortunately, you don’t have prep courses in the workspace.

But I’m fortunate to have a mentor who explains things in plain language.

Bento ah, think in this way ah. When you invest, sometimes you gain and sometimes you lose.

Sometimes your investment gets fucked lah, you know, lose a lot of money. This should happen once in a while. If it happens every day then we are no different than Deutsche.

Let’s just say we want to set a warning line that only gets crossed once in every 100 days. And in the other 99 days, we are chill lah. This is why we say CI is 99%.

So VaR is just an estimation of the warning line lah. We have 255 trading days a year, so we expect to cross the line 3 times a year.

In the real world, if we break this line too many or a few times, maybe we need to adjust our strategies. Make sense mah?

So I wish you enjoy learning things from my blog. However, if you want more accurate instruction, refer to Investopedia and Wikipedia, where I write articles in a more professional tone.