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My Life as a Quant: Reflections on Physics and Finance

3.74  ·  Rating details ·  2,055 ratings  ·  97 reviews
In My Life as a Quant, Emanuel Derman relives his exciting journey as one of the first high-energy particle physicists to migrate to Wall Street. Page by page, Derman details his adventures in this field--analyzing the incompatible personas of traders and quants, and discussing the dissimilar nature of knowledge in physics and finance. Throughout this tale, he also ...more
Hardcover, 292 pages
Published September 16th 2004 by Wiley (first published 2004)
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Oct 31, 2011 rated it really liked it  ·  review of another edition
There’s been handwringing over the last few years about all the smart young things coming out of university math and physics programs and heading for the big bucks on Wall Street. Like everyone else, I despise this despicable trend. Of course, Wall Street needs to be shut down. We need to go back to investing money the old fashioned way: in our demesnes, our serfs, and the Church’s indulgences. But reading a memoir like this one, you understand how the flight of brains to the Street can happen ...more
Mar 02, 2010 rated it really liked it
I didn't have any expectations of this book before I read it, other than it would hopefully give me some better insight into a part of the world of investment banking that I have worked. Towards the later part of the first half, I was starting to wonder when he would get to the finance part of his life, but once I got there I appreciated the lead-up. I was not looking to read a book on life in academia, but now that I have, I feel somewhat enlightened. The particulars of the physics theories ...more
Jan 25, 2013 rated it liked it
I picked up this book at the library because it was suggested by Goodreads or Amazon (I forget which) as a book I might like to read.

Derman got off to a bad start in the prologue (bottom of page 13) where he wrote, "How does a planet know that it must obey Newton's Laws, or an electron perceive that it must move according to the principles of quantum electrodynamics?" What? Planets must obey Newton's Laws? Electrons must move according to the principles of quantum electrodynamics? This guy, it
Aug 12, 2009 rated it liked it
This book was Emanuel Derman (Eman) dryly taking us through his life as a theoretical physicist turned quant. Though the material was fascinating, it was like listening to a boring professor -- dry, bland, and ultimately, self-defeating.

The one thing this book did have that was helpful is lots of context. We learn not only what Derman as a quant does, but why, and what the business context is for it. He also clearly has a passion for explaining theories clearly as opposed to high-brow.

Feb 10, 2008 rated it did not like it  ·  review of another edition
Not the most insightful of memoirs, this was more of a catalogue of professional achievements. In the first half, he reveals himself to be an incredibly arrogant physicist. (Full disclosure - in the book , Derman expresses scorn for both solid state physicists and experimentalists -- I myself belong to both of these categories.) In the second half which addresses his financial career, his arrogance is not as noticeable, so either he was actually humbled by his change in career, as he describes ...more
Sep 25, 2011 rated it really liked it
I finally finished Emanuel Derman's "My life as a quant" He is a great story teller. I found the stories around his life in physics much more appealing than his finance life. The most interesting part to me was the fact that his most interesting contributions came way after he finished his PhD. Also his detailed description of the implied tree model is very intuitive and interesting. Still, he is doesn't shy away from highlighting his weaknesses and struggles throughout his career and that makes ...more
Apr 06, 2013 rated it really liked it
Shelves: physics
A very honest and balanced account of life in academia and industry that doesn't glorify or damn either of them.

It discusses what life is like in Physics and the nature of the problems he got to work on and similarly in Quantitative Finance.

Although it could have used some mathematics he did introduce some things and one doesn't expect (or desire) a textbook so it was pretty good.

I would recommend it to anyone considering switching from academia to industry or vice versa.
Jun 18, 2019 rated it liked it
The book is a professional biography of Emanuel Derman. The book starts off more a philosophical text discussing the author's evolution through tertiary education which culminated in three post-doctoral stints at some of the world's top institutions. This early part of the book has interesting questions and observations such as "Ambition degradation" ie how ones ambitions degrade with time. an encouraging aspect of the book is how the author frankly discusses their own intellectual limitations ...more
May 12, 2018 rated it really liked it
The book surpassed my expectations. It provides a detailed look into the life of physics PhDs and professors in late 70s and 80s. When the author switches jobs, to move to Goldman Sachs, we have the opportunity to understand how the quants, physicists and mathematicians, came to set the trend on Wall Street with the invention of new models for trading complex securities, such as options, swaps and other structured products.
Kumar Ayush
Feb 24, 2019 rated it it was amazing
It was liberating to reconcile my observations and learnings 8 months into the job of a quant around two decades after Mr. Derman with his own experiences. The fundamentals have not changed much.
Dongliang Yi
Jan 07, 2017 rated it it was amazing
Basic introduction of the book:

The author, Emanuel Derman, is a co-developer of the short rate model – Black-Derman-Toy model. He is also the director of Columbia’s Financial Engineering program. One special thing worth mentioning is that he switched his career from physics to finance at his 40’s.

I read this book with recommendation from a financial engineering program. It is said to be useful for me to understand and accelerate a career in quantitative finance.

The first half part of this book
Nov 22, 2014 rated it really liked it
An interesting autobiography of Emanuel Derman describing his life in academia (PhD and couple of post-docs, particle physics) and as a quant on Wall-Street from early 80ies.

Both world are fascinating and Derman is an excellent observer.

Currently "celebrating" my first year out of academia a lot of his experiences really resonated with me (which is also telling - he did his postdocs in the 70ies, the situation hasn't changed much apparently).

The most interesting parts of the book for me were
Dave Bolton
Dec 31, 2009 rated it liked it
An interesting look at financial engineering from a former theoretical physicist who has made a career on Wall street. Covers the increasing sophistication of Goldman Sachs and their competitors from the early 80s to around 2000, including some key models (in a very light and non-intimidating way.)

Worthwhile if you are interested in financial markets or differences between research and practical science.
Feb 19, 2014 rated it it was amazing
A honest book on the journey up to the point when he left Goldman for Columbia Business School. The author does not dress up the important decisions he made: going to graduate school, picking out a research topic in graduate school, experience in post doctoral positions, as an assistant professor, as a new parent, as a new hire at ATT lab, as a new hire at Goldman... It is a humble account, and I think helpful for the young.
Jan 14, 2014 rated it it was ok
well..only if one is super interests on understanding Black/Scholes Price Options Theory in steroid mode, then one may not find this book interesting at all..pretty much like Greg Smith of describing his life stories at school, after school, boring here, and there..then finally the hype to break through to understanding more in depth of Black/Scholes Theory during his second tenure at Goldman Sachs..
Jul 28, 2008 rated it it was amazing
A book that describes the career of one of the most successful "quants" on Wall Street. It provides great insight into the often difficult transitions from academia/pure research to the world of corporate America. The book also attempts to answer the questions, who is a quant and what does a quant do. A must read for anyone having an identity crisis regarding their "quant" job!
David Murphy
Jul 01, 2010 rated it it was ok
The first third, the story of his life as a grad student and post-doc, was highly amusing. Not so entertaining was his story of actually being a quant. Not knowing much about finance, I was pretty lost as he talked about the various models he worked on. Still, he had some good insight into how and when financial models are useful.
Jul 15, 2007 rated it it was amazing
Recommends it for: people interested in quantitative finance
The surprisingly well-written autobiography of a South African physicist ("doomed to be just very smart in a field dominated by geniuses") who goes into finance and eventually becomes MD and head of Goldman's highly-regarded quantitative strategies group. If you are, might be, or ever were interested in quantitative finance, a must-read. If you're not, probably boring.
Steve Gross
Dec 01, 2012 rated it liked it
The author is bright and his career goes from PHD particle physicist to Bell Labs guy to Finance Engineer. Only the latter apparently makes him happy but he really yearns all the time to be back in physics. There's an undercurrent of an unhappy intellectual throughout the book. The latter part of the book is quite technical and only of interest to technical finance types.
Jan 09, 2009 rated it really liked it
Shelves: bio, finance, non-fiction
Emmanuel Derman is wise and highly respected in the quant world. This biography is special in that he tells his life story, but also explains the models he worked on in simple, clear prose. For someone like me (a nerd) it's inspirational.
Nikos Skantzos
Sep 10, 2009 rated it liked it
An interesting autobiography, from someone who jumped from theoretical physics to mathematical finance (or a leap from science to the "art" of financial modeling). Having worked with the godfather of the subject (F.Black), he knows first hand what he's talking about. At times it drags a bit.
Feb 02, 2012 rated it liked it
Shelves: biography
Derman is smart and apparently confident in himself. The complex technical details are well written to give me a rough idea. Nonetheless I feel that the book is inadequate. Maybe I ask for too much or maybe I know too little to begin with.
Matt Heavner
May 17, 2011 rated it really liked it
For a certain audience this is perfect. If you did physics grad school and are interested in finance (as a hobby or a career), this is highly recommended. Otherwise, either one (physics grad school/postdoc life) or the other (finance, options, derivatives) may be too deep for your taste.
Thai Son
Dec 27, 2013 rated it it was amazing
Shelves: biographical
I appreciated his reflections up until after his work at Bell Labs.

Some people have said that the ending part was rather lackluster, I agree, but I don't really judge on that. This is a reflection on life, not a secret-to-success book.

Apr 17, 2014 rated it it was amazing
Amazing book, really good work-life learnings other than just stocks.
My Life as a Quant is the autobiography of Emanuel Derman, charting his conversion from frustrated physicist into financial engineer. Derman must have kept a diary because he mentions specific things happening to him on specific days and dates. The prologue immediately becomes quite technical, but then the next few chapters are very general and gentle. Although, I guess the nature of options and derivatives isn't technical to the average quant. Indeed, I didn't really understand the nature of ...more
Nishit Asnani
Sep 20, 2019 rated it really liked it
Emanuel Derman describes how he went from being a grad student in physics to a quant on the Wall Street, and everything else that ensued in between. It is an entertaining read rich with personal anecdotes. Derman succeeds in painting a vivid picture of the physics community at Columbia in the late 60s and the early 70s, how his ambitions as a physicist and the reality of his contributions didn't match up, and a seemingly endless search for a job that was fulfilling as well as permanent. After a ...more
Sep 28, 2017 rated it liked it
The first 1/3 of the book was about his life as a physicist with quite many professional terms of what he has done and how he felt about the life he led. Second part 2/3 of book was about his life as a financial algorithms coder, worked back and forth in Goldman Sachs and Saloman Brothers (1 year).
I have to admit that for both physics and banking terms, i am not familiar, he wrote in a very geeky way, but when he talked about his struggles about life choice, marriage, his kids, I felt he got
Alex Pal.
Feb 09, 2020 rated it really liked it
After the boom in sciences and math, many mathematicians and physicists couldn't find easily academic positions (too much supply of people for only a few positions). Many of these people had to move to different fields and some went to wall street to use their quantitative skills in making money. These people are called "quants". Emanuel Derman was one of the first people to join Wall Street when the field of financial engineering was starting. He describes his life in academia as a grad student ...more
Anton Mies
Sep 10, 2018 rated it really liked it  ·  review of another edition
Quite entertaining book especially for someone with financial background using the models or considering going into the field (straight out of university). I personally took it for granted and didn't knew how the field and models got evolved.

Furthermore, in the first part of the book Derman describes his life as a postdoc in theoretical physics, granted it was in the 80s yet it might deliver some insights to someone considering doing a PhD. Derman describes the switching point from academia
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Emanuel Derman (born c. 1945) is a Jewish South African-born academic, businessman and writer. He is best known as a quantitative analyst, and author of the book My Life as a Quant: Reflections on Physics and Finance
“Once, sitting in my car in the parking lot outside Building 5 during a prolonged downpour after a long lunch off premises, Mark, Larry, and I pondered the famous two-condom combinatorial problem that spread through the Center: Two (heterosexual) couples decide to have group sex with each other in all possible male-female combinations. They have only two condoms, and everyone is scared of catching some venereal disease. How can they manage four couplings with only two condoms? The first man puts on two condoms, one over the other, and then sleeps with the first woman. Only the outer surface of the outer condom and the inner surface of the inner one has had contact with any potentially infectious surface. The man removes the outer condom and sleeps with the second woman. The second man then dons the removed outer condom whose inner surface has until now had no contact with anyone’s skin, and sleeps with the first woman, whose only contact has thus far been with the outside of the same condom. Finally, the second man dons the second condom over the one he is already wearing, and sleeps with the second woman, who again only experiences a condom she has already touched. It was impossible to resist the temptation to generalize to N couples.” 3 likes
“If you decide you don’t have to get A’s, you can learn an enormous amount in college.” 2 likes
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