OT: Career advice

[SnowblindNYR]

Does anyone know anything about logistic regression, ROC Curves, and AUC (Area Under the Curve)?

I'm working on a project that I gave myself at work. Basically this is what it entails:

1) Get default data and the principal and APR associated with it.

2) Use logistic regression to forecast default rates based on principal and APR.

3) Set the default rate as a formula as a function of average loan size and interest (yes I know technically APR and interest are not the same things but I figured this would be easiest). Then set average loan size (or the determinants thereof) and interest rate as variables, while optimizing the net income for one report and cash for another report.

The outcome of this hopefully is us optimizing the loan amounts and interest rates we charge based on the financials.

Now, this is all well and good BUT, I ran a logistic regression with the aforementioned data and it doesn't seem uber predictive. So one way to measure the strength of the model is by looking at the ROC Curve that plots false positives and true positives when looking at actual results vs. the model's prediction. If you look at the AUC (area under the curve) and it's high then there's a good ratio of true positives to false positives. An AUC of 50% means there's no predictive power. The model might as well be a coin flip. I got about 62% which is considered poor. Does anyone know of a way that I can adjust either the model or more usefully the probability calculation to make it work? My model is underrepresenting the amount of defaults. I was considering adjusting the prediction by that amount and then I realized I'd have probability rates of over 100% quite easily.

So either the data is bad, defaults are actually not predicted by principal and interest, at least at my company, or I'm missing something here, such as other variables. Can anyone help? Can I just not do this analysis?

Thanks!

 

[SnowblindNYR]

Also, even if the analysis isn't great is it still worth doing to show my abilities if I give the caveat of the analysis not being that great? Frankly I would just be doing it for show, though I don't know if that will make me look worse than if I just shelved it.

 

[Thordic]

Also, even if the analysis isn't great is it still worth doing to show my abilities if I give the caveat of the analysis not being that great? Frankly I would just be doing it for show, though I don't know if that will make me look worse than if I just shelved it.

I can't say I know anything about loans, not my area of finance, but I'd be wary of handing over bad data just because you think the process is good. I've had employees come to be with "great" ideas before, things that were likely pretty complex to put together but at the end of the day simply didn't provide any real use or benefit. It's the business equivalent of a Rube Goldberg machine in some cases. As a manager you appreciate the enthusiasm but at the end of the day it's about results.

If you have faith in your process, don't throw it out, but keep working on it until its useful. If you think the inputs are bad, see if you can find a way to get better inputs. Or be able to clearly show that the process is great and the only reason the output is eh is because the data is bad. There's a big difference between "This process is great, but the output isn't, and I'm pretty sure its the data's fault" and "This process is great but the data is bad and here is why. Get me good data and I'll get you better analytics."

 

[sbjnyc]

Does anyone know anything about logistic regression, ROC Curves, and AUC (Area Under the Curve)?

I'm working on a project that I gave myself at work. Basically this is what it entails:

1) Get default data and the principal and APR associated with it.

2) Use logistic regression to forecast default rates based on principal and APR.

3) Set the default rate as a formula as a function of average loan size and interest (yes I know technically APR and interest are not the same things but I figured this would be easiest). Then set average loan size (or the determinants thereof) and interest rate as variables, while optimizing the net income for one report and cash for another report.

The outcome of this hopefully is us optimizing the loan amounts and interest rates we charge based on the financials.

Now, this is all well and good BUT, I ran a logistic regression with the aforementioned data and it doesn't seem uber predictive. So one way to measure the strength of the model is by looking at the ROC Curve that plots false positives and true positives when looking at actual results vs. the model's prediction. If you look at the AUC (area under the curve) and it's high then there's a good ratio of true positives to false positives. An AUC of 50% means there's no predictive power. The model might as well be a coin flip. I got about 62% which is considered poor. Does anyone know of a way that I can adjust either the model or more usefully the probability calculation to make it work? My model is underrepresenting the amount of defaults. I was considering adjusting the prediction by that amount and then I realized I'd have probability rates of over 100% quite easily.

So either the data is bad, defaults are actually not predicted by principal and interest, at least at my company, or I'm missing something here, such as other variables. Can anyone help? Can I just not do this analysis?

Thanks!

As mentioned, I'd only share with people if you thought they'd find value in it. As for possible predictive factors in loan defaults, I'd think higher interest rates (though the causation might be reversed) and higher principle amounts would be predictive and maybe the age of the loan depending on how loans are originated. I should also add that if the loans are secured (like a mortgage), I'd expect a measure like loan-to-value would be predictive.

 

[SnowblindNYR]

Thanks guys, it does appear that the data might be off, I got new data. And yeah the causation might be reversed for interest rates, but I figured the total size of the payment might be onerous leading to defaults.

 

[Gardner McKay]

Do you all find slacks and a button down, or even a suit sans a tie, uncomfortable?

I’ve always been intrigued by this. We have a business casual dress code, but you need to wear suits when you meet with clients. I find slacks and a shirt to be quite comfortable, so even on a “casual” Friday, when people tend to dress down a bit, I will go business casual. Some of my colleagues are flabbergasted at the notion that I wouldn’t take full advantage of casual Friday. I even have friends that don’t work in my industry that have said they couldn’t even imagine working in it because of the dress code.

I find it a bit amusing, but maybe I’m just used to dressing this way now. Even a suit I don’t mind wearing (I’ll rip a tie off the moment I’m out of a client meeting though) but evidently I’m not the norm here.

I find it pretty comfortable. I still enjoy wearing jeans on Friday but I really don't mind slacks and a button down Monday - Thursday. However, I still have on a semi-nice pair of shoes on Friday. I just can't fathom wearing sneakers in the work place.

I have a hard time taking anyone seriously who wouldn't work in a particular industry because there is a dress code.

If there is one piece of dress advice you all should take, it is this - never, ever, ever wear sneakers with a suit. I once had a kid come in for an interview in a suit wearing brand new sneakers and it was hard to take him seriously. Additionally, if you are ever going for an interview and don't have/cant afford a suit, there is nothing wrong with tan khakis, a white/blue shirt, a blue coat and a red/yellow tie. You could probably find all of it at goodwill or something for really cheap.

 

[Ex Officer Friendly]

I find it pretty comfortable. I still enjoy wearing jeans on Friday but I really don't mind slacks and a button down Monday - Thursday. However, I still have on a semi-nice pair of shoes on Friday. I just can't fathom wearing sneakers in the work place.

I have a hard time taking anyone seriously who wouldn't work in a particular industry because there is a dress code.

If there is one piece of dress advice you all should take, it is this - never, ever, ever wear sneakers with a suit. I once had a kid come in for an interview in a suit wearing brand new sneakers and it was hard to take him seriously. Additionally, if you are ever going for an interview and don't have/cant afford a suit, there is nothing wrong with tan khakis, a white/blue shirt, a blue coat and a red/yellow tie. You could probably find all of it at goodwill or something for really cheap.

I prefer socks and sandals for interview shows I’m zen

 

[Thordic]

Our office went more casual a few years back after our division was acquired (bought by a smaller company from a large global bank).

Those of us who came from the bank side weren't big fans at first. I wore dress pants and shirts every day, French cuffs more often than not.

6 years later, you'd be hard pressed to find someone who doesn't wear jeans at least 2-3 days a week.

Business dress has changed a ton in the past 10-15 years. I was at a fairly major financial conference last week. I did suit with no tie all week, but many of the other booths, and these are large brokers, were manned by folks wearing polo shirts.

Definitely still dress up for interviews but work dress definitely seems to be trending towards more casual across the board.

 

[ColonialsHockey10]

I have a hard time taking anyone seriously who wouldn't work in a particular industry because there is a dress code.

I know. It’s ridiculous.

 

[sbjnyc]

I have a hard time taking anyone seriously who wouldn't work in a particular industry because there is a dress code.

Thats why I refused to sign with the Mets...

 

[SnowblindNYR]

So the new data set is even less predictive. I guess it'll be another one of those projects I did some work for had the methodology down and will put it on my resume. The methodology is sound, I'm definitely getting credit for it.

 

[SnowblindNYR]

I find it pretty comfortable. I still enjoy wearing jeans on Friday but I really don't mind slacks and a button down Monday - Thursday. However, I still have on a semi-nice pair of shoes on Friday. I just can't fathom wearing sneakers in the work place.

I have a hard time taking anyone seriously who wouldn't work in a particular industry because there is a dress code.

If there is one piece of dress advice you all should take, it is this - never, ever, ever wear sneakers with a suit. I once had a kid come in for an interview in a suit wearing brand new sneakers and it was hard to take him seriously. Additionally, if you are ever going for an interview and don't have/cant afford a suit, there is nothing wrong with tan khakis, a white/blue shirt, a blue coat and a red/yellow tie. You could probably find all of it at goodwill or something for really cheap.

Not sure if you're a football fan or watch the NFL network, but that's half the people on that network. So unprofessional.

 

[Roo Returns]

I have a hard time taking anyone seriously who wouldn't work in a particular industry because there is a dress code.

I don't think or know anyone who has ever done this. I do know tons of people who do what they have to do yet don't enjoy wearing many layer of clothes. Me included.

 

[Gardner McKay]

I don't think or know anyone who has ever done this. I do know tons of people who do what they have to do yet don't enjoy wearing many layer of clothes. Me included.

Cool. The poster I quoted did.

It is one thing to not enjoy it. I get that. It is another to refuse to work somewhere all together because of it. I think that is an absurdly childish and entitled mentality to have.

Not sure if you're a football fan or watch the NFL network, but that's half the people on that network. So unprofessional.

I don't have cable anymore so no NFL network, just watch Jets and Falcons and that is it. But yeah, it just looks terrible. It is like wearing plaid shorts with a striped shirt.

 

[East Coast Bias]

We went from suits every day in our NYC office to no tie required, to no jacket required but no jeans.

I'll be honest - I was all about losing the tie b/c I hate them. But call me old school, but I'm a fan of a jacket. Suit, shirt with an open collar is perfectly fine for me.

Our JC and Westchester offices allow jeans and polos year round. Its ridiculous to me. I find it hard to take orders from some guy wearing a polo he got for free at some golf outing. John Smith Memorial Golf Outing 10/20/2015 guy telling me to work smarter not harder.

 

[Thordic]

Our JC and Westchester offices allow jeans and polos year round. Its ridiculous to me.

It's ridiculous until you are surrounded in polos and jeans for years and eventually you're like "why am I still wearing dress clothes to work when no one cares?"

And I have no problem telling people what to do in my Key West Fishing Club polo

 

[Crease]

The NYC office of our law firm is jeans on Fridays all year. This is an international law firm with 1000 attorneys and offices across the globe. Did not expect that, but love it.

 

[NCRanger]

Nobody really cares what we wear on a daily basis. Some are more "business casual" than others. There are some who wear jeans and sneakers. There are some who do button downs every day. In technology with no facing customers, there's really no formal dress code. When we move to a technology building in the winter, I'm sure that will continue.

Company policy used to be jeans on Fridays, but FTEs always have the remote option on Friday, so I pretty much always take advantage of that.

I generally wear polos and khakis/dress pants from April - October.

I wear button downs and khakis/dress pants from mid October - April. I will occasionally add a sport jacket when the weather suits.

Remember, I'm in Charlotte, and it's almost always at least 90 from mid-May until October. If I was able to park outside my place of employment, I'd be wearing the button downs every day, but when I'm walking upwards of half a mile, no way I'm wearing that button down with a t-shirt under it in that heat.

 

[Roo Returns]

Cool. The poster I quoted did.

It is one thing to not enjoy it. I get that. It is another to refuse to work somewhere all together because of it. I think that is an absurdly childish and entitled mentality to have.



I don't have cable anymore so no NFL network, just watch Jets and Falcons and that is it. But yeah, it just looks terrible. It is like wearing plaid shorts with a striped shirt.

Interesting, I must have missed that from the other poster. Yeah man, basically you do what you need to do and ultimately if you enjoy dressing up and looking professional cool, that's your thing. If you have a more West Coast mentality like I have, you either do that in your spare time, or you work hard to get to a company or environment with that type of culture whether at a startup or remote in NY, or on the West Coast. West Coast is full of NYers, we even gave them two of our baseball teams on "permanent loan"

 

[dstoffa]

We went from suits every day in our NYC office to no tie required, to no jacket required but no jeans.

I'll be honest - I was all about losing the tie b/c I hate them. But call me old school, but I'm a fan of a jacket. Suit, shirt with an open collar is perfectly fine for me.

Our JC and Westchester offices allow jeans and polos year round. Its ridiculous to me. I find it hard to take orders from some guy wearing a polo he got for free at some golf outing. John Smith Memorial Golf Outing 10/20/2015 guy telling me to work smarter not harder.

It's ridiculous until you are surrounded in polos and jeans for years and eventually you're like "why am I still wearing dress clothes to work when no one cares?"

And I have no problem telling people what to do in my Key West Fishing Club polo

And then I simply ask myself, "What would Hank wear?"
And I say to myself, "I can't afford that..." But I don't want to look like my wardrobe consists of hand-outs, so I have no issue dressing the part when needed. I can rock a shirt and tie with the best of them...

 

[SnowblindNYR]

I accidentally ventured in the wrong Career thread. This place is probably more of a safe space for my next whine. Here's the post:

So I admit I might sound like a whiny millennial here. Apparently, the CEO has complained about a number of people including me being on social media at work.

Here's my problem:

1) I feel like he's spying on his employees

2) He just generally comes off as an ******* to me, calling people out (albeit not by name) that are on performance improvement during town hall meetings.

3) 1 + 2 makes sours me on the company though I generally really like my coworkers.

4) I'm pretty sure this (personal sites) is common at most, if not all companies.

5) I get my work done and I'm usually busy though lately, I've had downtime. His assumption that people that are on social media sites don't have work is false. I take short breaks once in a while and sometimes do it while my excel is calculating.

6) It just comes off as petty, we're not robots sometimes to optimize the effectiveness of employees a break is necessary. Doesn't mean you have to spend half the day on personal sites, but if you take a quick break is it that big of a deal? I think breaks generally improve productivity.

7) I'm already paid like at best an entry-level employee despite 7 or 8 years of work experience and an MBA from a good school.

 

[dstoffa]

I accidentally ventured in the wrong Career thread. This place is probably more of a safe space for my next whine. Here's the post:

So I admit I might sound like a whiny millennial here. Apparently, the CEO has complained about a number of people including me being on social media at work.

Here's my problem:

1) I feel like he's spying on his employees

2) He just generally comes off as an ******* to me, calling people out (albeit not by name) that are on performance improvement during town hall meetings.

3) 1 + 2 makes sours me on the company though I generally really like my coworkers.

4) I'm pretty sure this (personal sites) is common at most, if not all companies.

5) I get my work done and I'm usually busy though lately, I've had downtime. His assumption that people that are on social media sites don't have work is false. I take short breaks once in a while and sometimes do it while my excel is calculating.

6) It just comes off as petty, we're not robots sometimes to optimize the effectiveness of employees a break is necessary. Doesn't mean you have to spend half the day on personal sites, but if you take a quick break is it that big of a deal? I think breaks generally improve productivity.

7) I'm already paid like at best an entry-level employee despite 7 or 8 years of work experience and an MBA from a good school.

1. Expect no privacy at work. It's in my employer's handbook. They have the right (and should) be monitoring network traffic - albeit not to spy on you per se, but to keep company assets safe (from worms, viruses, etc.)

2. The work / productivity expected from your boss (or the business manager) is not reflective on the amount of money being spent (on employees). There are several ways to look at this, and the first is if you are an exempt or non-exempt employee.

3. I'll am in management. I personally don't care (within reason) what my staff does at work as long as they get their job done on time, and on budget. I have no issues with distractions, but when the work is late and/or deadlines are approaching, and products aren't coming across my desk for checking / review / approval, I don't want to see you swiping at your phone or setting your fantasy lineup on your computer when I come to ask for a SITREP.

Back to the exempt / non-exempt... If you are paid by the hour (non-exempt), don't goof off. If you are exempt (salaried no matter how many hours you work), I would be more inclined to look the other way, provided you deliver your work on-time. If that means you stay late an hour "unpaid" because you spent an hour during the day on Crack-book, then so be it.

Remember, you boss is paying you for a service. How would you like it if you hired a contractor to do work on your house, and he spent 1/4 of the day on his smartphone?

 

[SnowblindNYR]

1. Expect no privacy at work. It's in my employer's handbook. They have the right (and should) be monitoring network traffic - albeit not to spy on you per se, but to keep company assets safe (from worms, viruses, etc.)

2. The work / productivity expected from your boss (or the business manager) is not reflective on the amount of money being spent (on employees). There are several ways to look at this, and the first is if you are an exempt or non-exempt employee.

3. I'll am in management. I personally don't care (within reason) what my staff does at work as long as they get their job done on time, and on budget. I have no issues with distractions, but when the work is late and/or deadlines are approaching, and products aren't coming across my desk for checking / review / approval, I don't want to see you swiping at your phone or setting your fantasy lineup on your computer when I come to ask for a SITREP.

Back to the exempt / non-exempt... If you are paid by the hour (non-exempt), don't goof off. If you are exempt (salaried no matter how many hours you work), I would be more inclined to look the other way, provided you deliver your work on-time. If that means you stay late an hour "unpaid" because you spent an hour during the day on Crack-book, then so be it.

Remember, you boss is paying you for a service. How would you like it if you hired a contractor to do work on your house, and he spent 1/4 of the day on his smartphone?

Usually (not always) when I'm at a time crunch I put my head down and work. I understand technically it doesn't matter how much I'm getting paid. But it seems like "we're not paying you to visit personal sites" when you're not paying me market rate is extremely petty. But whatever.

 

[dstoffa]

Usually (not always) when I'm at a time crunch I put my head down and work. I understand technically it doesn't matter how much I'm getting paid. But it seems like "we're not paying you to visit personal sites" when you're not paying me market rate is extremely petty. But whatever.

Well, whatever "Market Rate" is is always subject to interpretation. Some will consider market-rate is the lowest rate the work will be performed for; this would be set on the seller / employer side. Others consider market-rate the cost expected by the employee, based on external inputs such as cost-of-living and expected wage; this is driven by the buyer / worker side. In reality, it's somewhere in the middle. It's muddy depending on the industry and the location.

Regarding your second-to-last sentence, I have a funny story for you. I was spending time on AIM (on the clock) in the early 2000's. (I actually planned a whole (free) trip overseas on AIM without picking up a phone, and to this day, I still find this funny... but I digress.) My coworkers thought they were clever by using DarkAIM or setting the window transparency, but they weren't fooling anyone, simply because I told them, "You are typing away into a blank screen you fool...." Anyway, my boss had caught me chatting away. He flat out told me, "I know you're getting your work done, but don't use these chat services.." I replied (and my inner-New Yorker had the balls to say), "In reality, there is no difference between using AIM and picking up the phone... So would you stop calling your wife while at work?" to which my boss said, "touche" and let it go.

My advice, if they are looking for a reason to thin staff, your computer usage is something they can cite. Minimize your risk. Only visit sites when you are on lunch, or taking a coffee break. There are things an employer will overlook when they are dealing with *good* staff, but when they have *bad* staff doing the same things, it puts them in a bind. As a manager, I never want to have to choose favorites (even though I have my selection of stallions to ride when the time comes), so please don't force my hand at ruining work-place happiness for everyone by taking the toys away...

 

[SnowblindNYR]

Well, whatever "Market Rate" is is always subject to interpretation. Some will consider market-rate is the lowest rate the work will be performed for; this would be set on the seller / employer side. Others consider market-rate the cost expected by the employee, based on external inputs such as cost-of-living and expected wage; this is driven by the buyer / worker side. In reality, it's somewhere in the middle. It's muddy depending on the industry and the location.

Regarding your second-to-last sentence, I have a funny story for you. I was spending time on AIM (on the clock) in the early 2000's. (I actually planned a whole (free) trip overseas on AIM without picking up a phone, and to this day, I still find this funny... but I digress.) My coworkers thought they were clever by using DarkAIM or setting the window transparency, but they weren't fooling anyone, simply because I told them, "You are typing away into a blank screen you fool...." Anyway, my boss had caught me chatting away. He flat out told me, "I know you're getting your work done, but don't use these chat services.." I replied (and my inner-New Yorker had the balls to say), "In reality, there is no difference between using AIM and picking up the phone... So would you stop calling your wife while at work?" to which my boss said, "touche" and let it go.

My advice, if they are looking for a reason to thin staff, your computer usage is something they can cite. Minimize your risk. Only visit sites when you are on lunch, or taking a coffee break. There are things an employer will overlook when they are dealing with *good* staff, but when they have *bad* staff doing the same things, it puts them in a bind. As a manager, I never want to have to choose favorites (even though I have my selection of stallions to ride when the time comes), so please don't force my hand at ruining work-place happiness for everyone by taking the toys away...

Makes sense, I asked my coworker (the controller), who is probably the #2 finance guy and I'm pretty good friends with if I should be concerned. He said it's not some job defining concern and I should just focus on doing good work for my boss.