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The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It
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The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It

by
3.82  ·  Rating details ·  6,140 Ratings  ·  304 Reviews
“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,
...more
Hardcover, 352 pages
Published February 2nd 2010 by Crown Business (first published 2010)
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Andy
May 12, 2013 rated it it was ok
(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
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David
Mar 10, 2011 rated it liked it
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
Szplug
Dec 29, 2011 rated it it was ok  ·  review of another edition
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
Joy
Mar 04, 2011 rated it really liked it
I'm a bit naive when it comes to the Wall Street world of statistical arbitrage and collateralized debt obligations, so I learned something new on every page of this book. I'm not sure I followed all of the different players and why exactly my mortgage is more expensive than my house, but this was definitely an interesting (and mostly accessible read) about how our economy ended up in the dumps and whet my appetite for more. Also, perhaps the stock market wasn't really a good idea in the first p ...more
Brad Mills
Mar 15, 2017 rated it really liked it
This book is pretty dense. I wouldn't recommend it to a casual reader. I am starting an algorithmic trading fund, so I liked this book because I am trying to get more focused information on the history of algorithmic trading on Wall St and with traditional investment firms.

If you're looking for entertaining stories about wall st and trading, this is not really the book for you.

It's a great backstory that walks you through the original algorithmic traders on wall st and how their quantitative a
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Wes Devauld
Jan 10, 2012 rated it it was ok
Shelves: trading, finance
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
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Ob-jonny
Nov 01, 2012 rated it liked it
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
Bryan Kibbe
Jun 09, 2011 rated it it was amazing
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
Max Stone
Jun 16, 2010 rated it it was ok
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
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Dev Scott Flores
Dec 31, 2013 rated it really liked it
I don't think I've ever witnessed the reviews of a book which more pointedly reflect the personal biases/grievances/et al of the reviewers as this one does ... I worked a floor down from one of the main "characters" in this book from 2002-2007, so I know lots of these "types" in the real world and I don't think my experience has colored my perception of this as being an engaging & entertaining narrative. Some of these concepts could have been explained more easily - others, more thoroughly - ...more
Phil Simon
Sep 25, 2012 rated it really liked it
Shelves: business
I've read more than a few books on Wall Street's latest fiasco. Much like [[ASIN:0393338827 The Big Short: Inside the Doomsday Machine]], The Quants makes what would be a dry narrative more interesting by focusing on characters as much as arcane stock market theories. While I liked Lewis' book a bit more, the Quants more than holds its own. I enjoyed learning more about the history the sub prime mess.

At times, I had a hard time keeping track of the characters. Patterson is a gifted writer and I
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Luaba
Mar 06, 2010 rated it it was amazing
Shelves: science
one of the most comprehensive book on the most recent financial collapse, written in an exciting way. And one does not have to be a ph.d to understand it.
Lucas Peres
Feb 03, 2016 rated it really liked it
Shelves: biografias, financas
Uma descrição dinâmica, e eu sou suspeito por gostar, já que é parte do meu dia a dia profissional. Mas as ideias mostradas no livro e o desespero perante as crises deixaram a leitura MUITO boa!
Nicholas Nash
Nov 27, 2016 rated it it was amazing
Very well written and highly entertaining. Must read. Great real-life characters.
Pablo
Feb 21, 2017 rated it liked it
A great insight into the lives and businesses of some of the most important personalities of the hedge fund industry , from AQR to Citadel among others etc.. The author describes the interesting stuff the quants dealt with and the "fun" stuff they did outside of work. In the end the crisis of 2007/2008 hit their pockets hard and the account by Mr. Patterson is such it's hard to put the book down.
While I appreciate the research that came behind the book and the solemnity and robustness with whic
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Byrne
Mar 21, 2017 rated it it was ok
This book is an OK summary of the careers of a couple quants. Mostly things you'd get from reading extensive profiles of them, but with a couple vignettes I hadn't seen elsewhere.

What drove me batty was the author's motif of the search for The Truth.

Here's how he describes it:

>Regardless of which signature trade each man favored, they had something far more powerful in common: an epic quest for an elusive, ethereal quality the quants sometimes referred to in hushed, reverent tones as the Tru
...more
Brown
Jul 18, 2017 rated it liked it
Interesting book about the beginning of the Great Recession, although I don't know if you can blame everything on the quants. Sure, they made some stupid mistakes that f****ed the country, but there were others involved as well. I do ultimately believe that it is impossible to beat the market, and that those who do are lucking their way to success. Quantitative analysis is really interesting, but there is no "alpha", no Truth.
铭 杰
Aug 02, 2017 rated it really liked it
Exciting read chronicling the adventures of quants and how they became the biggest, obscure part of the world's financial system. Excessive risk taking caused them to destabilize the system in the search for ever larger profits. With increasing rates of financial innovation outpacing regulators we can be sure that another financial crisis may be looking ahead with their aggressive trading.
Thọ Đỗ
Jul 05, 2017 rated it really liked it
A story about the legendary Ed Thorp, the godfather of quant finance,...
A history of most famous quant funds: Rentech, Citadel, AQR, PDT, Saba, ...
And how they were involved in the credit meltdown 2008.
Willis
Jul 28, 2017 rated it it was ok
I had a hard time getting through this one because it felt like it was repeating the same stories over and over, math whiz makes a killing, math whiz loses it in the 2008 financial crash, over and over.
AJ Ostrow
Jun 10, 2017 rated it it was amazing
It's well researched. I enjoyed the poker and black jack anecdotes, also the disdain for Gaussian models.
Billy
Jun 21, 2017 rated it really liked it
Overview of the 1990's into the '08 Financial Crisis, awesome account of the profiles and personalities of top tier quantitative traders and their lives
Andrew
Jun 03, 2017 rated it really liked it
good
Jon
Jul 11, 2017 rated it liked it
Slow in parts but interesting as welll
Jack
May 08, 2017 rated it liked it
Now I understand how the big recession of 2008 happened and why the Dodd-Frank rules are an absolute must and should never be repealed!!
Akhil Jain
Jun 15, 2017 rated it really liked it
Even the best of quant minds lose when they get arrogant, and start riding the wave along with copy cats..

fav quote:
The light at the end of the tunnel is of an oncoming freight train..
Chris Bauerschmidt II
Aug 02, 2017 rated it really liked it
Interesting.
Devin
Apr 13, 2013 rated it really liked it
Some reviews that I read before I started the book suggested the the best parts lay in the first half of the book, followed by an overly technical second. Although I very much enjoyed the first several chapters in which you're introduced to several of the key quantitative fund managers, I actually found the most interesting read in chapters 10 - 13 of the 14 chapter book. 10 - 13 takes you through the events of the financial market collapse from their perspective which I found very insightful an ...more
Erwinpantel
Mar 08, 2017 rated it it was amazing  ·  review of another edition
Interesting look at Hedge Funds

An interesting look inside and the some of the key individuals involved with hedge funds over the past 20-30 years. Very interesting examination of the foundation for their work.
Rick
Jun 08, 2017 rated it liked it
Shelves: finance
There aren't many hedge fund books out there - in that genre it's actually pretty good, but as an overall read, it is a bit too narrow, very shallow (hardly discusses any investing theory) and felt unfinished. It focused on the "quant crash" of 2007 and some of the higher profile quant fund managers who were impacted. It is an okay profile of a number of these people, many of whom survived the financial crisis and are thriving today. Seemed like he had access to a number of them and that may hav ...more
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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...

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“Insiders say the pressure to succeed at Renaissance can be brutal. One mathematician at the fund may have succumbed to the pressure on March 1, 2006. That’s when Alexander Astashkevich, a thirty-seven-year-old MIT graduate who worked at Renaissance, shot and killed his estranged wife in the small town of Port Jefferson, Long Island, before turning the shotgun on himself. He left behind a six-year-old son named Arthur.” 1 likes
“Regulators lent a helping hand. On a spring afternoon in late April 2004, five members of the Securities and Exchange Commission gathered in a basement hearing room to meet a contingent of representatives from Wall Street’s big investment banks to talk about risk. The banks had asked for an exemption for their brokerage units from a regulation that limited the amount of debt they could hold on their balance sheets. The rule required banks to hold a large reserve of cash as a cushion against big losses on those holdings. By loosening up these so-called capital reserve requirements, the banks could become more aggressive and deploy the extra cash in other, more lucrative areas—such as mortgage-backed securities and derivatives.” 0 likes
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