The Quants

The Quants is the debut New York Times best selling book by Wall Street journalist Scott Patterson.[1][2] It was released on February 2, 2010 by Crown Business. The book describes the world of quantitative analysis and the various hedge funds that use the technique.[3][4] Two years later, Patterson published a follow-up book, Dark Pools: High Speed Traders, AI Bandits and the Threat to the Global Financial System, an investigative journey into the history of high-frequency trading and the spread of artificial intelligence in today’s markets.[5][6]

The Quants
How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It
Hardcover edition
AuthorScott Patterson
CountryUnited States
LanguageEnglish
SubjectFinance, trading, investing
GenreNon-fiction
PublisherCrown Business
Publication date
February 2, 2010
Media typePrint, e-book
Pages352 pp.
ISBN0-307-45337-5
Followed byDark Pools 

Background

Patterson began writing The Quants in 2008. He was first exposed to the quantitative analysis investment strategies while covering the financial industry for the Wall Street Journal.[7] As he became more acquainted with the players involved, he found that many of the most successful quants knew each other and carried similar eccentricities.[7] Realizing this was a world that the average investor knew little of, Patterson wrote the book to shed light on the strategies, players, and related risks of such trading strategies.[7]

Synopsis

The introduction to The Quants describes the real-life, annual, high-stakes poker match between Wall Street's hedge fund managers, comparing their trading styles to their poker strategies.[8] It focuses on, among other things, the 2007 subprime mortgage crisis and how it helped trigger a sudden and massive unwinding of complex, highly leveraged quantitative strategies. The book also delves into critical short-comings of many quantitative strategies, such as their tendency to lead to crowded trades and their underestimation of the likelihood of chaotic, volatile moves in the markets.[9]

The book also delves into the background of the various vanguards of quantitative analysis. It tells the history of Beat the Market & Beat the Dealer author Ed Thorp; Pete Muller from Morgan Stanley's hedge fund; Ken Griffin from Chicago's Citadel LLC; James Simons from Renaissance Technologies; Clifford S. Asness and Aaron Brown from AQR Capital Management; and Boaz Weinstein from Deutsche Bank.[10][11]

Reception

The Quants debuted on The New York Times bestseller list.[1] Jon Stewart featured Patterson as a guest on The Daily Show and described the book as "unbelievable."[4] Patterson was a guest on NPR, and Ed Thorp, one of the book's main characters, joined Patterson for a live interview.[10] The New York Times profiled the book, calling it "fascinating and deeply disturbing."[2] The Quants received additional profiles in Bloomberg, BusinessWeek, Scientific American, Financial Times, and Minyanville.[2][3][4][7][8][9][10][11]

See also

References
  1. "Hardcover Nonfiction Books - Best Sellers - March 7, 2010 - The New York Times". The New York Times. ISSN 0362-4331. Retrieved 2020-07-03.
  2. Hurt III, Harry (February 20, 2010). "In Practice, Stock Formulas Weren't Perfect". New York Times.
  3. Pressley, James (February 18, 2010). "How Quants Made a Killing—and Made a Mess". BusinessWeek. Archived from the original on April 24, 2010.
  4. Stewart, Jon (March 4, 2010). "Scott Patterson". The Daily Show.
  5. Cendrowski, Scott (June 22, 2012). "Reasons to fear Wall Street's high-tech traders". CNN Money. Archived from the original on June 25, 2012.
  6. "High Speed Threats to Global Financial Systems". CNBC.
  7. Collins, Greg (April 13, 2010). "The Quants: Q&A With Scott Patterson". Minyanville.
  8. Patterson, Scott (September 22, 2011). "How Math Whizzes Helped Sink the Economy]". Scientific American.
  9. Sender, Henny (February 11, 2010). "Wall St maths geniuses whose models did not add up". Financial Times.
  10. "'The Quants': It Pays To Know Your Wall Street Math". NPR. February 1, 2010.
  11. Pressley, James (February 10, 2010). "Citadel's Griffin Skirts Disaster, Taleb Fumes: Books (Update1)". Bloomberg L.P.
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