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

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

by Scott Patterson
3.6 139

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Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It 3.6 out of 5 based on 0 ratings. 142 reviews.
Pentheus More than 1 year ago
I read Patterson's book awhile ago and enjoyed the combination of its pace and illuminating details. I do not work on Wall Street so the context of this foreign land with its exquisite creatures resembled something almost fictional. Unfortunately this strange world GAMBLES with our retirements. After reading reviews here and elsewhere I have found an interesting reaction. Those with a vested interest (or simply want a cheap kindle version) have bashed the book with knee jerk that if nothing else shows it has struck a cord with those in the know. Squelch is an obvious industry insider trying to limit the truth in the book
dried_squid More than 1 year ago
Read a review of the "The Big Short" which ended with the question of whether "The Quants" was better, or complementary. I think it's complementary. Whether one calls it math, blind luck, strategy, or tactics, it's not too different. In this case, the traders relied on math to filter, then deliver "crucial" information to their attention, or the attention of the computer doing the trading unattended. "The Big Short" also mentions the ratings agencies, while "The Quants" does not. Probably because it follows a different theme. Seems like ratings agencies should be considered, because many trades were based upon ratings. From the "The Quants", I was exposed to more of the different types of trades, and some of the economic theory in which they live. "The Quants" focus on the role of the math whizzes and the effects of their trading on Wall Street. "The Big Short" follows the stories of a handful of traders as well, but with less history or economic theory or ripple effect. I liked the dialog in the "The Big Short" better. In the long run, I'm happy to have read both.
Lbio More than 1 year ago
I started in my quuest to understand how as an innocent investor, my net worth had crumbled with Charles Gasparini's book (the first one out) which really focused on the risk taking "genes" inherent in many of the Wall Street Players. They were often international level poker players and took on enormous risks and horrendous leverage. I then read Sec. Henry Paulson's book which was a little like being dropped into a Rugby scrum without knowing the rules - he did often define terms, but gave you no idea of the range of values. He is a defender of the "free market" (the market is all knowing and will correct itself unaided). In 2005, before he accepted the Secreatary of Treatury position, Goldman Sachs led the credit default swap popularization. He was a CEO, but like so many of them, not truly knowledgable about what his company was doing. His book shows how close we came to a depression, but is somewhat insensitive and self-serving in my opinion. Scott's book focuses on the mathematics which mathematicians, statisticians and physicists used to try to find the "Truth". What they failed to comprehend was that their idealized equations are not well connected to reality. Their equations failed to handle the "rare" event in the tail of bell shaped curves, which is exactly what happened. I have seen this for years in my scientific careers. This book does an excellent job of explaining what happened. It follows the key characters within the companies, explains how Lehman did itself in, not Paulson as some suggest, and describes his internal battle to save the finanical system which had frozen up, despited deeply held beliefs that this was not how government should act. I still don't understand, however, having AIG receive 100 cents on the dollar. I still think that should have taken some of their lumps for their stupidity rather than have the taxpayer salvage them to the tune of billions of dollars. In a true Free Market society, the losers fail, not be rescued by the taxpayer while the taxpayer's net worth crumbles.
Anonymous More than 1 year ago
While the cast of characters is hard to follow at times, overall this is an excellent analysis of the "quants" and their dubious contributions to world financial markets. The explanations and defininitions of the mechanisms used by the "quants" and their role in our financial crisis should be required reading to any investor who doesn't spend eight hours a day working in the real financial world.
squelch More than 1 year ago
Scott Patterson's _The Quants_ was thoroughly terrible. Patterson confuses financial engineering with quant trading. He misleads readers about the real cause of the credit crisis, which wasn't quants at all, but rather egocentric, overly greedy and under-regulated executives at various banks. It is pathetic to see how widely his dead-wrong views are being adopted among other journalists, as this means for sure that a convenient scapegoat has been found on which we can blame all our troubles. Patterson also arbitrarily uses the label "quant," calling whatever he feels like hating a quant strategy or technique, and calling whomever he wants to make out as a villain a quant. Boaz Weinstein isn't a quant, and neither is Ken Griffin. Both are credit traders, who use very deep fundamental analysis and gut instincts to make their trades. Cliff Asness and Pete Muller, the two actual quants of the four major personalities profiled, didn't do anything to cause or perpetuate any crises. The style of the writing reminded me of a cross between the National Enquirer and a Batman comic. Nerd king, math whiz, math wizard, value king, whiz-bang, crack team, "it was nuts," and whiz kid don't belong in serious books. His metaphors were terrible: "churning wheels of the Money Grid," for example. He claims that the carry trade was a "frictionless digital push-button cash machine based on math and computers-a veritable quant fantasyland of riches." This horrible abuse of the English language is also hyperbolic nonsense. Then there was this nonsense: "its hedge funds held about $140 billion in gross assets on $15 billion in capital, or the stuff it actually owned." And my favorite: "Lo's view of the market was more like a drum-pounding heavy metal concert of dueling forces that compete for power in a Darwinian death dance." What the hell?
Anonymous More than 1 year ago
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Couldn't put it down!
cez819 More than 1 year ago
Highly Recommended
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Paul Zetterower More than 1 year ago
Though some of the words are foreign to nonconomics persons like myself, this book still dors a pretty good job of explaining the eco meltdown.
Bill_EE More than 1 year ago
Very well written account of the subprime mortgage crisis that led us to the situation we are in today.
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