Sign in with Facebook
Loading...
39th out of 139 books
—
44 voters
The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It
by
Scott Patterson (Goodreads Author)
“Beware of geeks bearing formulas.”
--Warren Buffett
In March of 2006, the world’s richest men sipped champagne in an opulent New York hotel. They were preparing to compete in a poker tournament with million-dollar stakes, but those numbers meant nothing to them. They were accustomed to risking billions.
At the card table that night was Peter Muller, an eccentric, whip-...more
--Warren Buffett
In March of 2006, the world’s richest men sipped champagne in an opulent New York hotel. They were preparing to compete in a poker tournament with million-dollar stakes, but those numbers meant nothing to them. They were accustomed to risking billions.
At the card table that night was Peter Muller, an eccentric, whip-...more
Hardcover, 352 pages
Published
February 2nd 2010
by Crown Business
(first published 2010)
Friend Reviews
To see what your friends thought of this book,
please sign up.
Community Reviews
(showing
1-30
of
3,000)
Meh. The pervasive Poker Theory forces Patterson into a straightjacket as regards his casting decisions—colourful though these depicted characters prove to be—and he assigns the label Quant to those who do not seem to merit it and blame for the economic crisis of 2008 to these same Quants in what, in my humble opinion, is a mostly erroneous and misplaced determination of guilt. The background story itself is quite intriguing, as is the proliferation of mathematical modeling in financial markets,...more
(Disclaimer: I worked in derivatives on Wall Street for several years, though this book is more focused on stat arb, not my area.)
This book reminded me of When Genius Failed, not only in content matter but in style. This isn't a great thing, as I thought both books were hampered by some corny dramatics. In both cases the authors picked an inherently exciting topic; let the excitement tell itself and spend your energy telling us things we don't know rather than trying to inject more adrenaline i...more
This book reminded me of When Genius Failed, not only in content matter but in style. This isn't a great thing, as I thought both books were hampered by some corny dramatics. In both cases the authors picked an inherently exciting topic; let the excitement tell itself and spend your energy telling us things we don't know rather than trying to inject more adrenaline i...more
Modern quantitative finance was invented by Edward Oakley Thorp, a mathematician who in the early 1960s developed a card-counting scheme in blackjack that made him money in Las Vegas, a story also told in William Poundstone's Fortune's Formula. In 1964 during a game of baccarat, somebody offered Thorp a cup of coffee spiked with drugs; he heeded this warning, and left for Wall Street, the biggest casino of all, finding market anomalies and betting that they would right themselves. Through the 19...more
This book describes some of the causes of the financial crisis at the most fundamental level. It's an oversimplification to state that the financial crisis was caused by the banks behaving badly. It's more satisfying to know the details and the human interaction and decision making that went into it. The hedge funds weren't the only cause of the financial crisis which was more due to the housing bubble, merging of big banks, and excessive leveraging. But the hedge funds were the guys who did muc...more
Este libro explica un montón de cosas sobre la crisis de 2008, entrando tras un montón de puertas que yo creía que siempre habían estado cerradas. Es una lectura muy interesanet y muy bien llevada sobre cómo afectó el crack a los hedge funds, fondos de inversión sin reglas escritas sobre cómo invertir el dinero. Fondos de inversión discrecionales, podríamos llamarlos. En ellos, los más afamados traders se llevan cada año el 2% de lo que gestionan y el 20% de lo que ganan, operando en mercados gu...more
This is a very interesting account of how a relatively small cadre of mathematically-trained investment gurus started large hedge funds, and ultimately played a role in the financial collapse of 2007 and 2008. It has a special interest for me, because I personally know some of the people involved (professional colleagues, not personal friends).
The author clearly has a finely honed skill for casting pictures of these people, capturing both their background and education as well as personal idiosy...more
The author clearly has a finely honed skill for casting pictures of these people, capturing both their background and education as well as personal idiosy...more
As a book that reads as a narrative of the growth of mathematics in finance, as well as a who's who of the largest players in the industry, this book deserves 4 out of 5 stars. The book is easy to read and the author is very capable in making his point. The friendly narrative reads almost as a planned fiction with a well planned and executed story. It would probably be an enjoyable if read by someone that does not have a hard science background.
The reason for the low rating is two fold: The auth...more
The reason for the low rating is two fold: The auth...more
I read over half of this book, and skimmed the final part. It was rather technical, but I think I understood the basic points. The stock market is impossible to accurately predict, but this collection of computer nerds and math geniuses thought that it might be possible, and for many years, they were able to do the impossible. The greatest financial minds in world of finance were convinced that the secrets of the market had been cracked . I don't think that there was any criminal intent, in fact...more
Aug 11, 2011
Aleeda
added it
Scott Patterson deftly takes a subject that has always fascinated me: how engineering and physics Ph.Ds wound up taking over Wall Street, and makes it a fascinating read.
Patterson made me understand that being able to solve math equations that very few people in the world can will not make you smart enough to understand that these formulas and hypotheses that work in the math world won't run so smoothly in the financial world. Why? Surprise! People are sometimes IRRATIONAL.
The book's research i...more
Patterson made me understand that being able to solve math equations that very few people in the world can will not make you smart enough to understand that these formulas and hypotheses that work in the math world won't run so smoothly in the financial world. Why? Surprise! People are sometimes IRRATIONAL.
The book's research i...more
As someone that does not normally traffic in world of high finance or the jargon associated with it, I found this book to be fascinating and eye-opening. Patterson crafts a compelling narrative about the rise and fall of an extremely talented set of mathematicians and economists that came to dominate stock markets with quantitative modeling, sophisticated computer algorithms, and rapid fire computer based trading. Indeed, Patterson's grim conclusion suggests that perhaps the recent stock market...more
The author of this book makes a big deal of the fact that the major players in his story treated stock price time series like Gaussian random variables. And they lost big time in 2008. Two of the minor players in the book, Nassim Taleb (author of The Black Swan: The Impact of the Highly Improbable) and Benoit Mandelbrot (of fractal fame, and author of The (Mis)Behavior of Markets and Fractals and Scaling In Finance) had an entirely different concept. They treat stock prices as distributions with...more
Personally, any book that keeps me turning pages even though I barely understand it should get 5 stars. Since I don't do Wall Street or finance, I was completely ignorant that there were a whole bunch of Ph.D. mathematicians who had started up quantitative hedge funds. What that really means is mega-math brains (known as Quants) armed with tons of data on how the markets have responded over the years and super-fast supercomputers. Interestingly, most of them started young with a fascination for...more
Jeebus this book was pretty bad. I felt compelled to read it because I know some large fraction of the characters involved, but I don't really recommend it for anyone.
For starters, a lot of the facts are not overly factual.
Next, if you already know about the quant kerfuffle, there is very very little you will learn from this book. And if you don't know about the quant kerfuffle, why on earth would you want to?
He takes random potshots at people (e.g. what does he have against Eugene Fama (effici...more
For starters, a lot of the facts are not overly factual.
Next, if you already know about the quant kerfuffle, there is very very little you will learn from this book. And if you don't know about the quant kerfuffle, why on earth would you want to?
He takes random potshots at people (e.g. what does he have against Eugene Fama (effici...more
This book was both inspiring and appalling. Inspiring, because I wish I had been smart enough and motivated enough to make the millions (nay, billions) of $ some of the subjects of this book made at playing the market with complex financial models. (I could have done that. Really. I think.) It also inspires me to become a card counting blackjack player. (Many of them started this way.)
But mainly I am appalled by unmitigated greed. By a willingness to do anything to make money. By how much money...more
But mainly I am appalled by unmitigated greed. By a willingness to do anything to make money. By how much money...more
Nicely-written, fairly concise summary of the credit crisis and the "quants" that were major players in the alphabet soup (CDO, MBS, etc.) financial world. Patterson makes this very readable for non-financial types and it's a nice blend of personal stories and financial reporting. He stays mostly on the sidelines with respect to his opinions, but does say near the end:
"The quants in attendance somehow didn't think it ironic that their own profession amounted to a massive brain drain of mathemati...more
"The quants in attendance somehow didn't think it ironic that their own profession amounted to a massive brain drain of mathemati...more
A very nicely done cautionary tale about the dangers of mistaking mathematical elegance for reality and of believing that the "market" is driven by rational processes. Patterson looks at the rise and sudden fall of the Quants, the breed of math-PhD financial analysts and traders who re-built arbitrage and bond trading in the 1980s and 1990s and--- for a few golden years ---made (literally) billions. Patterson describes, though he doesn't focus on, the clear links between the Quants' conception o...more
In this book, Scott Patterson follows the rise of Wall Street's "quants", the mathematicians and financial modeling "experts" who were responsible for some of the enormous sums of money pocketed by hedge funds in the late 90's and first half of the 00's. Patterson seems to give the quants the rock-star treatment, with plenty of gushing about cars, money, supermodel girlfriends and the like. In some ways, he seems to idolize the quants, using terms like "Mathlete" and "Guru". This is where I disa...more
This book describes the type of Wall Street analyst called a quant -- a quantitative analyst, that applies advanced math techniques to try to discern patterns in stock prices and other investments.
The book starts off with a description of how Wall Street investing evolved from class seat-of-the-pants investors to technical analysis. This part of the book -- particularly the stories of how the quants actually operate.
The later part of the book describes how some large hedge funds fared during the...more
The book starts off with a description of how Wall Street investing evolved from class seat-of-the-pants investors to technical analysis. This part of the book -- particularly the stories of how the quants actually operate.
The later part of the book describes how some large hedge funds fared during the...more
An excellent read that lays out comprehensive timeline of developments leading to the 2008 meltdown of the financial market, or at least the role that quant trading played in that debable. Patterson traces the evolution of game theory as a foundation for trading from card counting at blackjack tables to high-volume black box trading driven by obscure heuristic algorithms.
Readers with insight into technology and money market mechanics will be rewarded, although the book never gets bogged down in...more
Readers with insight into technology and money market mechanics will be rewarded, although the book never gets bogged down in...more
Mr Patterson presents a story of math-maniacs taken by both their own egos as well as a massive dose of human greed. The book does not offer any amazing insight, but does add some detail to what most of us expected.
That being said, the devil is in the details, and in that sense the book is interesting, and even important in some ways. It is not life-changing, but no information that is as esoteric as the stock market ever is.
The reader finds himself both amazed at the mathematical prowess, the...more
That being said, the devil is in the details, and in that sense the book is interesting, and even important in some ways. It is not life-changing, but no information that is as esoteric as the stock market ever is.
The reader finds himself both amazed at the mathematical prowess, the...more
I read some of the other reviews,
funny,
some people thought the best part of the book was the first half.
I had the other opinion,
the first half is mostly gossip about the personal lives of people I'll never meet, and who are greedy, shallow, and crude.
The book doesn't offer any psychological insights that I found interesting.
The last half gets into what they were doing,
and this book tells the story better than the average book about this crisis.
All of these "quants" created math models for sk...more
funny,
some people thought the best part of the book was the first half.
I had the other opinion,
the first half is mostly gossip about the personal lives of people I'll never meet, and who are greedy, shallow, and crude.
The book doesn't offer any psychological insights that I found interesting.
The last half gets into what they were doing,
and this book tells the story better than the average book about this crisis.
All of these "quants" created math models for sk...more
An excellent account of the development of financial derivatives during the 1990s and first decade of the new century. It follows some of the leading academics who did much of their foundation work on derivatives in the 1970s and 1980s at the University of Chicago when I was there -- but only really started to act in the market later.
There are many aspects of the derivative trade to come under examination: the different instruments (collateralized debt obligations, credit default swaps, bond def...more
There are many aspects of the derivative trade to come under examination: the different instruments (collateralized debt obligations, credit default swaps, bond def...more
The best parts of this book were quite engrossing, on the level of Michael Lewis' writings. Unfortunately, those parts were too few and far between. Most of the book wasn't about the personalities of the quants but just a rundown of the financial games they were playing, which is material that has been done many other places and done better -- for people interested in down to earth explanations of the financial goings on in hedge funds and the like, NPR's PLANET MONEY team cant be beat. Moreover...more
Apr 13, 2010
Supernova1987agmail.com Wang
rated it
5 of 5 stars
Recommends it for:
people who are keen to understand the nature of modern finance
I read this book while I was on a multi-country trip in Europe. It provided endless entertainment to my long train and plane rides between cities. Sure, blackbox trading is a heavy subject, but Patterson did a masterful job of explaining a rather complex history of the quants. His narritive is precise and personal, his tones collected and unbiased. It provides a rare insight into the the shadowy world of hedge funds and the role of finnancial engineering in today's market.
Perhaps I'm the one who...more
Perhaps I'm the one who...more
In March of 2006, the world’s richest men sipped champagne in an opulent New York hotel. They were preparing to compete in a poker tournament with million-dollar stakes, but those numbers meant nothing to them. They were accustomed to risking billions.
At the card table that night was Peter Muller, an eccentric, whip-smart whiz kid who’d studied theoretical mathematics at Princeton and now managed a fabulously successful hedge fund called PDT…when he wasn’t playing his keyboard for morning commu...more
At the card table that night was Peter Muller, an eccentric, whip-smart whiz kid who’d studied theoretical mathematics at Princeton and now managed a fabulously successful hedge fund called PDT…when he wasn’t playing his keyboard for morning commu...more
Fascinating biography of 5 Quants who parleyed their love of mathematics and probabilities into billion dollar fortunes. You can't help but admire their drive and ingenuity. These are American success stories of driven men who were smart and hard working. They also happened to be in the right place, Wall Street, at the right time, late 1990's. I do not agree with author's assertion that they almost destroyed Wall Street, rather they were an enabler of the high leverage employed and the breathtak...more
Jun 28, 2010
James
rated it
4 of 5 stars
Recommends it for:
anyone interested in the recent market meltdown or the future of Wall Street
Shelves:
2010
An interesting insightful book about several of the major "quants" on Wall Street during the recent debacle, i.e., the quantitative investors who rely on complex mathematical equations and high-speed computers. The author does a good job explaining how these formulas and investment strategies work for laymen, which is a difficult challenge since many people who work in finance don't understand. It is a strong cautionary tale, although sometimes I think the author puts more blame on his subjects...more
"The Quants" starts with stories about mathematically breaking games of chance, like blackjack and roulette, duplicating some of the stories of Bringing Down the House. Stories on this theme are mixed in throughout the book to illustrate the growth of applied mathematics beyond gambling on "games of chance" to betting on the market. The rest of the book is as expected. I enjoyed this book because of the good storytelling. One nit, and I've noticed this in many recent non-fiction books, is that p...more
I struggled in deciding whether to give this book three or four stars. If you want a blow-by-blow analysis of the financial crisis and it's major players on both Wall Street and in Washington, read Andrew Ross Sorkin's "Too Big to Fail." This book is a historical survey of the complicated quantitative models that came to dominate the financial sector in the years before the late-2000s credit crisis. I appreciated Patterson's easy-to-understand explanations of credit default swaps, collateralized...more
This book explains what happens when some of the best scientific/mathematical minds in the nation are lured by the promise of wealth and power on Wall Street. These "Quants" constructed algorithms, that is complex mathematical formulas, to "read" the stock market to their benefit. And, as is always the case, some of the assumptions upon which these algorithms were based turned out to be flawed. Ironically, this was due in large part to the fact that multiple groups of "Quants" were working at th...more
There are no discussion topics on this book yet.
Be the first to start one »
I'm the author of a new book called Dark Pools, as well as a New York Times best-seller called The Quants. I'm a reporter for The Wall Street Journal, covering financial regulation from Washington, D.C. I've also written for the New York Times, Rolling Stone and Mother Earth News. I have a masters of arts degree from James Madison University and currently live in Alexandria, Virginia.
More about Scott Patterson...
Share This Book
No trivia or quizzes yet. Add some now »
Mar 03, 2011 09:12am