The Quants
{{Short description|2010 book by Scott Patterson}}
{{Infobox book
| name = The Quants
How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It
| image = The Quants.jpg
| size =
| caption = Hardcover edition
| author = Scott Patterson
| country = United States
| language = English
| genre = Non-fiction
| subject = Finance, trading, investing
| publisher = Crown Business
| release_date = February 2, 2010
| media_type = Print, e-book
| pages = 352 pp.
| isbn = 0-307-45337-5
| followed_by = Dark Pools
}}
The Quants is the debut New York Times best selling book by Wall Street journalist Scott Patterson.{{Cite news|title=Hardcover Nonfiction Books - Best Sellers - March 7, 2010 - The New York Times|language=en-US|work=The New York Times|url=https://www.nytimes.com/books/best-sellers/2010/03/07/hardcover-nonfiction/|access-date=2020-07-03|issn=0362-4331}}{{cite web|last=Hurt III|first=Harry|title=In Practice, Stock Formulas Weren't Perfect|url=https://www.nytimes.com/2010/02/21/business/21shelf.html|work=New York Times|date=February 20, 2010}} 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.{{cite web|last=Pressley|first=James|title=How Quants Made a Killing—and Made a Mess|url=http://www.businessweek.com/magazine/content/10_09/b4168070829612.htm?campaign_id=rss_null|archive-url=https://web.archive.org/web/20100424015512/http://www.businessweek.com/magazine/content/10_09/b4168070829612.htm?campaign_id=rss_null|url-status=dead|archive-date=April 24, 2010|publisher=BusinessWeek|date=February 18, 2010}}{{cite web|last=Stewart|first=Jon|title=Scott Patterson|url=http://www.thedailyshow.com/watch/thu-march-4-2010/scott-patterson|publisher=The Daily Show|date=March 4, 2010}} 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.{{cite web|last=Cendrowski|first=Scott|title=Reasons to fear Wall Street's high-tech traders|url=http://features.blogs.fortune.cnn.com/2012/06/22/dark-pools-scott-patterson/|publisher=CNN Money|date=June 22, 2012|url-status=dead|archiveurl=https://web.archive.org/web/20120625010314/http://features.blogs.fortune.cnn.com/2012/06/22/dark-pools-scott-patterson/|archivedate=June 25, 2012}}{{cite web|title=High Speed Threats to Global Financial Systems|url=http://video.cnbc.com/gallery/?video=3000095861&play=1|publisher=CNBC}}
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.{{cite web|last=Collins|first=Greg|title=The Quants: Q&A With Scott Patterson|url=http://www.minyanville.com/businessmarkets/articles/quants-scott-patterson-fat-tails-todd/4/13/2010/id/27748|publisher=Minyanville|date=April 13, 2010}} 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. 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.
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.{{cite web|last=Patterson|first=Scott|title=How Math Whizzes Helped Sink the Economy]|url=http://www.scientificamerican.com/article.cfm?id=quants-book|publisher=Scientific American|date=September 22, 2011}} 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.{{cite web|last=Sender|first=Henny|title=Wall St maths geniuses whose models did not add up|url=http://www.ft.com/intl/cms/s/0/d0fbfad4-16ad-11df-aa09-00144feab49a.html#axzz223gU2rnb|publisher=Financial Times|date=February 11, 2010}}
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.{{cite web|title='The Quants': It Pays To Know Your Wall Street Math|url=https://www.npr.org/templates/story/story.php?storyId=123209339|publisher=NPR|date=February 1, 2010}}{{cite web|last=Pressley|first=James|title=Citadel's Griffin Skirts Disaster, Taleb Fumes: Books (Update1)|url=https://www.bloomberg.com/apps/news?pid=newsarchive&sid=aH4r5gwyu_OE|publisher=Bloomberg L.P.|date=February 10, 2010}}
Reception
The Quants debuted on The New York Times bestseller list. Jon Stewart featured Patterson as a guest on The Daily Show and described the book as "unbelievable." Patterson was a guest on NPR, and Ed Thorp, one of the book's main characters, joined Patterson for a live interview. The New York Times profiled the book, calling it "fascinating and deeply disturbing." The Quants received additional profiles in Bloomberg, BusinessWeek, Scientific American, Financial Times, and Minyanville.
See also
- More Money Than God (2010), a financial book by Sebastian Mallaby
- The Big Short (2010) by Michael Lewis
References
{{Reflist|2}}
External links
- {{cite book |title= The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It |isbn= 978-0307453372|last1= Patterson |first1= Scott |year= 2010 |publisher= Crown Business}}
- {{cite web |url= https://www.wsj.com/articles/SB10001424052748704509704575019032416477138 |title= The Minds Behind the Meltdown: How a swashbuckling breed of mathematicians and computer scientists nearly destroyed Wall Street |first= Scott |last= Patterson |publisher= Wall Street Journal |date= January 22, 2010 }}
- {{cite web |url= http://www.math.columbia.edu/~woit/wordpress/?p=2762 |title= The Quants |work= Not Even Wrong |publisher= Dpt Mathematics, Columbia University |first= Peter |last= Woit |date= 25 February 2010 }}
- {{cite web |url= http://thedailyshow.cc.com/videos/66huib/scott-patterson |archive-url= https://web.archive.org/web/20140714212746/http://thedailyshow.cc.com/videos/66huib/scott-patterson |url-status= dead |archive-date= July 14, 2014 |title= Scott Patterson |publisher= The Daily Show |date= March 5, 2010 |quote= Jon Stewart interviews author }}
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Category:Books about stock traders