The Quants
How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It
by Scott Patterson · first published 2000
75% recommend25% neutral
Why HN recommends it
Narrative history of quantitative hedge funds and math traders on Wall Street, covering firms like Renaissance and their rise and fall. A readable account of the field, useful for finance-curious readers.
Summarised by Claude from recommending comments
"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, whip-smart whiz kid who'd studied theoretical mathematics at Princeton and now managed a fabulously successful hedge fund called PDT...when he wasn't playing his keyboard for morning commuters on the New York subway. With hi
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…you, even when your vision implies the rest of the world is d0000med in an almost end-of-money kind of way :) Now move into an interesting layer of finance, which all of us Hackers will enjoy ... The Quants by S. Patterson This has the making of a great movie if only hacking were interesting on film (too bad its not really like Hugh Jackman in Swordfish!). Buffet: "beware of geeks bearing formulas" ...…
on “Michael Lewis: Don't Eat Fortune's Cookie” ↗…counter point to Nanex, check out Cliff Asness' notes. He founded AQR inside of Goldman Sachs and it became one of the first real power house quant funds. His writings are awesome! Or just read "The Quants" http://www.amazon.ca/The-Quants-Whizzes-Conquered-Destroyed/... as he's featured prominently in it. https://www.aqr.com/cliffs-perspective/
on “The advantage high-frequency trading firms have over everyone else” ↗Regarding Rentec, the only decent book on their history has been in "The Quants". Are there any others? https://www.amazon.com/Quants-Whizzes-Conquered-Street-Destr...
on “Numerai, a hedge fund built by a community of anonymous data scientists” ↗Some finance books I love (and reread frequently). These books are more about characters and stories, more than traditional non-fiction. My Life as a Quant by Emanuel Derman The Quants by Scott Patterson A Man for All Markets by Edward O. Thorp Reminiscences of a Stock Operator by Edwin Lefevre Flash Boys by Michael Lewis
on “Ask HN: What article/book do you recommend for my next flight?” ↗You might want to take a look at a book entitled "The Quants" by Scott Patterson. He talks extensively about Medallion. Inception, speech recognition people, etc.
on “A Moneymaking Machine Like Few Others” ↗Id recommend "Dark Pools" and "The Quants" both by Scott Patterson. "Flash Boys" is a fun read since its written by Michael Lewis(good storyteller) but Ive heard have claim it isnt very accurate.
on “The accidental HFT firm” ↗…Beginners", Thubten Chodron "Working with Anger", Thubten Chodron Reading For Pleasure: "Naked Statistics", Charles Wheelan "Algorithms to Live By", Brian Christian and Tom Griffiths "Dark Pools" "The Quants", Scott Patterson "The Physics Of Wall Street", James Owen Weatherall Plus some Chinese books, I wont bore with the details, unless anyone wants to know. Fun Fact, while I was in China for 8 weeks in…
on “Ask HN: What books do you keep on your desk?” ↗William Poundstone, Fortune's Formula: The Untold Story of the Scientific Betting System That Beat the Casinos and Wall Street Scott Patterson, The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It
on “Ask HN: What are some of the best books you have read in 2022?” ↗…is the currently fashionable means of reducing risk and b) it is seen as a feature not a bug. Citation: Any book about the 2008 financial crisis, or the 1998 crisis, or the 1987 crisis, e.g. [0] 'The Quants', Scott Patterson [1] 'When Genius Failed', Lowenstein. [2] 'Demon of Our Own Design', Richard Bookstaber.
on “Walmart Fires VP in Tech for Taking Daily Kickbacks Starting from $30K” ↗The only other book that covers this as far as I know is The Quants by Patterson.
on “D.E. Shaw and how computer geeks and English majors transformed Wall St. (2018)” ↗A lot of this story was told in "The Quants" by Scott Patterson: https://www.amazon.com/Quants-Whizzes-Conquered-Street-Destr...
on “Claude Shannon, the Las Vegas Shark (2017)” ↗CEO of Citadel Capital. He's one of the people featured in 'The Quants How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It', Scott Patterson.
on “Carnegie Mellon University Announces Historic $3B Gift from Ken Griffin” ↗The Quants by Scott Patterson
on “Ask HN: What are you reading?” ↗