A quant is also referred to as the “Rocket Scientist on Wall Street,” and that phrase conjures up an image of someone who is smart, well-educated, and very highly paid – perhaps millions of dollars a year. In typical buy-side quantitative investment firms, the work environment is collegial and professional; and it is a place where you will have plenty of opportunities to gain new knowledge. Therefore, it's not hard to understand why many top engineering and science graduates from the best universities in the world want to become quants.

Over the last 10 years, I have managed hundreds of quants, and I have also talked to thousands of aspiring quants during many recruiting events in over 10 countries. A frequent question that comes up is: What does it take to become a successful quant?

In order to answer this question, we surveyed and interviewed many top-tier quants. We identified the following seven habits as the most important reasons for their success.

1. Willing to put in the extra effort

   Highly successful quants are willing to put in the necessary extra efforts to reach their success. If failure is the mother of success, then extra effort is the father.

   I had once hired an extremely smart young man from a top-tier university. In the interviews, he was able to solve our very difficult analytical questions at such a fast speed that we suspected he had seen those questions before. Since he did so well in all our interviews, we decided to take some time to make up a set of brand new, very tough questions for him; yet again he aced them at lightning speed. We were so pleased that we found such a gem. After he came on board, however, I discovered he had a serious flaw. He did not work hard. He would party in the evenings and stay out late at nights, such that he would often wake up late and run into the office at 10 a.m., while others would have already started at 8 a.m. When I talked to him about this, he would shape up for a while. Then he would be back to his old ways and fall behind like a sleeping hare. He never became the best.

   On the other hand, I have hired people who are smart but not necessarily the smartest. I have seen them among the first ones to come to the office and among the last ones to leave – day after day, month after month, and year after year. Over time, such people slowly yet steadily got ahead of the others, one at a time, and they eventually became among our top performers. Of course, among the people I've seen, those who are both the smartest and hardest working are bound to become successful quickly. But given a choice between steady extra effort and higher raw IQ, steady extra effort wins.

2. Always make sensible changes, don't just try to fit the model to the data

   Alpha research is an experimental process during which one comes up with many hypotheses and tries many experiments. Many of the hypotheses and experiments will not result in excellent results. When the results are not good enough, the easy thing to do is to tune the model parameters until it passes a certain minimum threshold. This type of alpha does not perform well in the real market. Successful quants will try to figure out the reasons for the suboptimal results, and try to make refinements that make sense. Such alphas will be more likely to perform well in the real market.

3. Eager to experiment with new ideas

   Successful quants are interested in exploring new ideas and new data. Sometimes, in order to explore new territories, more preparatory or foundation work will need to be done; the successful quants are willing to do that work. If one waits until all the roadblocks have been removed, then much of the treasure will have already been found by others.

4. Do value-added work

   When creating alphas, it is easier to create an alpha that is a slight variation of other proven alphas, and it is harder to come up with an alpha based on a new idea. However, it is the latter that adds more value to portfolio management. Successful quants put in more effort in coming up with alphas based on new ideas.

5. Have a strong sense of urgency

   The most successful quants have a strong urgency to get things done. When they have an idea, they can't wait to try it. They are always thinking about alpha research, are very quick to follow through, and are very active mentally.

6. Form synergistic teams

   Many highly successful quants try to form teams with other good quants, whom they like and trust. Teammates discuss alpha ideas, share research tools, help each other through temporary setbacks, and break the monotony of solitary research. Through this teaming process, they become more productive, end up with more results, and create a more enjoyable working environment for themselves.

7. Set high targets

   For the final habit, I'll use an old saying: “Shoot for the moon. Even if you miss, you'll land among the stars.”

These are the seven habits of a highly successful quant. Follow them well, and one day you may find that a princely life of a highly successful quant suits you to a tee.