My Life as a Quant: Reflections on Physics and Finance

Brilliant!

Dr.E.Derman's book offers a rare and useful insight into the relatively complex world of Finance,where information asymmetry can be potentially dangerous. His experiences and encyclopedic knowledge are a godsend and help us understand both the benefits and,more importantly,the pitfalls of financial instruments and financial innovation. Dr.E.Derman is a rare genius,a scientist,a financial engineer,and last but not the least,a good human-being all rolled into one.

Packed with Knowledge !

This excellent autobiography covers the emotional life of a thoughtful man. Emanuel Derman examines his conscience dispassionately and honestly, offering a sometimes poignant account of his descent from the world of pure science to the hustle of Wall Street. His memoir flows like a conversation, albeit with many tangents. You¿ll learn more than you want about personnel changes at his former firms, but you¿ll also gain rare insights into how Wall Street makes decisions, plus a few excellent points about the inadequacy of financial theory as science. Derman¿s descriptions of options theory and financial models sometimes approach clarity, but may be far beyond the lay reader¿s understanding. We recommend this book to avid students of Wall Street and to any academic contemplating a move there. General readers who would enjoy Derman¿s reminiscences, and who do not mind tackling some dense scientific and financial material, will find an in-depth life story with moving reflections on the disparity between youthful ideals and mature compromises.

A must read for quants, their managers, and everyone else too

After reading Emanuel Derman's memoir, 'My Life as a Quant', I realized just how precise the selection of each word in the title phrase is. Yes, Derman is indeed one of the foremost experts in the field that is known today as 'financial engineering' and many on Wall Street would name him first if they were asked to give an example of a great QUANT. But far from being just an account of the professional field, this book is much more - it is an account of LIFE, its journeys and decisions, the people and the times. But ever so modest, even while philosophizing, Derman did not forget to put the word 'MY' in the title - it must have been the instinct of a physicist and a financial modeler who has seen too many theories stretched beyond their range of applicability that made him to explicitly narrow down the claim to the universal truth about the life of quants. The book is touchingly personal, almost impossibly honest for the world of Wall Street, where everyone keeps their cards close to the vest, and no one likes to admit being even slightly wrong. Following the footsteps of his favorite anthroposophist Rudolf Steiner, Derman opens to the readers the complexities and confusion of life, the mistakes as well as the great accomplishments, the accidental as well as the purposeful. This book is a must read for any scientist who contemplates a career in finance. Moreover, it is a must read for any manager who faces the everyday challanges of keeping those unruly quant minds in line. And finally, it is a must read for everyone else who could use something more intellectual than Dilbert cartoons (and even wittier at times -- if you can read between the lines) as a conversation topic about keeping one's sanity in the corporate world.

A Writer and a Gentleman

'My Life as a Quant' is not just a book that everyone on Wall Street should read. Given the highly quantitative nature of finance, practitioners from all parts of the trading world will find Derman's comments illuminating and insightful. It is the book most quants (that is, physicists turned quants) have been dreaming of writing since they were given access to the world of finance. Derman describes the common path of a physicist's acceptance of his own mediocrity in the last paragraph of pag. 28. Each one of us starts their career in physics by dreaming of becoming the next Einstein. Soon we find ourselves envying the post-doc who has been invited just to give a talk somewhere or has published a 4 page Phys. Rev. Lett. soon to be forgotten. He does a wonderful job of making clear that in order to be successful on Wall Street you really need to get your hands dirty. For every theoretician on Wall Street, a few that are equally good at computers are necessary as well. This is more true today than ever before. Also, he points out a cathartic quality of doing simple and useful work that others value. During stretches of low or no inspiration (99% of the time), it keeps you afloat, paid, and with no feelings of deep frustration. To everyone, Derman is that physicist who made the transition from particle physics to doing something great at Goldman Sachs. That much is certainly true. In addition, he is also a compassionate gentleman. I know of many people around the world who he has helped especially at the very beginning of their careers. He feels for cranks too. Derman has proved to be a brilliant writer. He left signs of this in previous publications by citing Aristotle more often than martingales. You always had the impression that he was a writer trapped in the format of Goldman Sachs Quantitative Strategies Research Notes and its disclaimers. Wiley has finally unleashed him.

Well worth reading

I normally do not read biographies, and I don¿t think I have read an autobiography since I was forced to read one in high school. Most autobiographies are simply exercises in celebrating the successes of a great life. I chose this one because Derman has always been a fascinating person. One of the first physicists to make it big on Wall Street, he¿s best known as co-creator of the Black-Derman-Toy term structure model and the Derman-Kani volatility smile model. I had read his finance research, some of his lighter reading, and had met him. I knew he wasn¿t one to gloat. This book delivers everything I expected. Offering fascinating insights into the culture of organizations he has worked for, such as Goldman Sachs, Bell Labs, Salomon Brothers, and the crazy world of academic physics, Derman takes us on an exciting trip through a career that parallels the emergence of finance as a scientific discipline on both Wall Street and in academia. What fascinated me the most is how he describes his achievements in very modest terms, carefully explaining what he discovered but without trying to make you think that his findings changed all life on earth from that point forward. And he is remarkably candid about his mistakes, which humanize this book in a way rarely seen when someone is telling their personal story. If you¿re interested in finance, physics, academia, or you¿d just like to read an autobiography the way it ought to be written, this book is for you.

Delightfully Rendered

As the path from Physics to Wall Street is looking more and more like a highway these days, Derman's book is especially relevant. I dare say there are Wall Street shops that have bigger Physics Departments than some Universities. His journey from Physics to Finance is a fascinating one and sure to entertain. One anecdote even had me laughing out loud on the train during my morning commute. Derman is highly regarded in his field. It would be a surprise to encounter a Quantitative Analyst (Quant) working in Finance who is not familiar with at least one of his models. He is also an excellent writer who is able to explain difficult concepts to the lay reader. I found his descriptions of what it is like to work both at Goldman Sachs and Salomon Brothers especially illuminating. His portrait of Fisher Black was especially poignant. As a former Physicist who now works as a Financial Engineer, Emanuel's book really hit home. It was exciting to see a story close to my own so delightfully rendered.

Goodbye Tom Wolfe, Hello Emanuel Derman

Quants are becoming the new 'masters of the universe.' Reducing money making from art to science, Derman personifies this new breed. A natural storyteller, he writes with the eye of a novelist, the insight of a physicist, and the instincts of a trader. Buy the book.

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