Here’s an entry sent in by Chuck Gray. Chuck says a lot of people will already have seen this. I hadn’t and it’s just about the best business analysis I’ve seen of why a guy with money shouldn’t marry a girl for her looks. It begins with an ad in Craigslist - a girl looking for a guy.

Girl Asks - What am I doing wrong?

Okay, I’m tired of beating around the bush. I’m a beautiful (spectacularly beautiful) 25 year old girl. I’m articulate and classy.
I’m not from New York . I’m looking to get married to a guy who makes at least half a million a year. I know how that sounds, but keep in mind that a million a year is middle class in New York City, so I don’t think I’m overreaching at all.

Are there any guys who make 500K or more on this board? Any wives? Could you send me some tips? I dated a business man who makes average around 200 - 250. But that’s where I seem to hit a roadblock. 250,000 won’t get me to central park west. I know a woman in my yoga class who was married to an investment banker and lives in Tribeca, and she’s not as pretty as I am, nor is she a great genius. So what is she doing right? How do I get to her level?

Here are my questions specifically:

- Where do you single rich men hang out? Give me specifics- bars, restaurants, gyms

-What are you looking for in a mate? Be honest guys, you won’t hurt my feelings

-Is there an age range I should be targeting (I’m 25)?

- Why are some of the women living lavish lifestyles on the upper east side so plain? I’ve seen really ‘plain jane’ boring types who have nothing to offer married to incredibly wealthy guys. I’ve seen drop dead gorgeous girls in singles bars in the east village. What’s the story there?

- Jobs I should look out for? Everyone knows - lawyer, investment banker, doctor. How much do those guys really make? And where do they hang out? Where do the hedge fund guys hang out?

- How you decide marriage vs. just a girlfriend? I am looking for MARRIAGE ONLY

Please hold your insults - I’m putting myself out there in an honest way. Most beautiful women are superficial; at least I’m being up front about it. I wouldn’t be searching for these kind of guys if I wasn’t able to match them - in looks, culture, sophistication, and keeping a nice home and hearth.

Guy Replies - We would call you a trading position, not a buy and hold

I read your posting with great interest and have thought meaningfully about your dilemma. I offer the following analysis of your predicament.

Firstly, I’m not wasting your time, I qualify as a guy who fits your bill; that is I make more than $500K per year. That said here’s how I see it.

Your offer, from the prospective of a guy like me, is plain and simple a crappy business deal. Here’s why. Cutting through all the B.S., what you suggest is a simple trade: you bring your looks to the party and I bring my money. Fine, simple. But here’s the rub, your looks will fade and my money will likely continue into perpetuity…in fact, it is very likely that my income increases but it is an absolute certainty that you won’t be getting any more beautiful!

So, in economic terms you are a depreciating asset and I am an earning asset. Not only are you a depreciating asset, your depreciation accelerates! Let me explain, you’re 25 now and will likely stay pretty hot for the next 5 years, but less so each year. Then the fade begins in earnest. By 35 stick a fork in you!

So in Wall Street terms, we would call you a trading position, not a buy and hold…hence the rub…marriage. It doesn’t make good business sense to “buy you” (which is what you’re asking) so I’d rather lease. In case you think I’m being cruel, I would say the following. If my money were to go away, so would you, so when your beauty fades I need an out. It’s as simple as that. So a deal that makes sense is dating, not marriage.

Separately, I was taught early in my career about efficient markets. So, I wonder why a girl as “articulate, classy and spectacularly beautiful” as you has been unable to find your sugar daddy. I find it hard to believe that if you are as gorgeous as you say you are that the $500K hasn’t found you, if not only for a tryout.

By the way, you could always find a way to make your own money and then we wouldn’t need to have this difficult conversation.

With all that said, I must say you’re going about it the right way. Classic “pump and dump.”

I hope this is helpful, and if you want to enter into some sort of lease, let me know.

Here’s a guest post from Jim Wallace. Jim noticed in one of my former blog posts that I used to teach physics. He thought I’d be interested in this summary of a BBC Radio item about mathematics in finance.

London has become an international centre for the world’s most talented mathematicians, who try to make fortunes writing financial models and trading algorithms for hedge funds and investment banks.

These mathematicians are employed as quants (Quantitative Analysts).

William Hooper says he fell in love with mathematics at university. He then came up with an idea to apply his skills to foreign exchange deals.

He analyses forex data from the previous 12 months and writes computer models to identify and quantify relationships in the data. He then writes an algorithm to make profitable forex trades based on the relationships.

Provided the algorithm is running profitably, William spends his time attempting to make it more profitable. In practice he says he has plenty of time for vacations and visits the gym – it’s a nice way to trade.

Although he would not directly say how much he was paid, William said that the general rule is that quants are paid about 20 percent of the profit they make. Typical algorithmic traders make annual profits for their banks/funds of $10 to $20 million.

William said his own model doesn’t make astronomical amounts of money – some can make sums of the order of a billion dollars per annum. These, however, are riskier models than can lose two billion the year after they have made a billion.

David Harding – who runs the hedge fund Winton Capital Management - studied theoretical physics at Cambridge. Winton trades world wide futures markets using a proprietary model based on a statistical model of market behaviour.

David Harding entered the financial sector in the early nineteen eighties, when few people thought there was any special place for mathematics in trading. That soon began to change and by the mid-nineteen eighties, increasing numbers of mathematicians and scientists were moving into trading and investing.

He says Winton Capital employs some very “improbable” types of people – people who are lacking in social skills but are very focussed researchers. Winton requires that people are clever and obsessively interested in researching areas of interest to the firm.

The lack of social skills will not suit all firms however. Many banks need mathematicians who are able to communicate their ideas to less numerate colleagues.

You can listen to the interview here:

http://news.bbc.co.uk/player/nol/newsid_7090000/newsid_7099200/7099200.stm?bw=nb&mp=wm&news=1&ms3=6&ms_javascript=true&bbcws=2

Jim Wallace