''The Quants'' is the debut New York Times best selling book by

Wall Street Wall Street is an eight-block-long street in the Financial District of Lower Manhattan in New York City. It runs between Broadway in the west to South Street and the East River in the east. The term "Wall Street" has become a metonym for t ...

journalist A journalist is an individual that collects/gathers information in form of text, audio, or pictures, processes them into a news-worthy form, and disseminates it to the public. The act or process mainly done by the journalist is called journalism ...

Scott Patterson Scott Gordon Patterson (born September 11, 1958) is an American actor and musician. He is known for his role as Luke Danes in ''Gilmore Girls'' and as Special Agent Peter Strahm in the ''Saw'' films. He also starred as Michael Buchanan in the ...

. It was released on February 2, 2010 by

Crown Business The Crown Publishing Group is a subsidiary of Penguin Random House that publishes across several fiction and non-fiction categories. Originally founded in 1933 as a remaindered books wholesaler called Outlet Book Company, the firm expanded into ...

. The book describes the world of quantitative analysis and the various

hedge funds A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as shor ...

that use the technique. 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 High-frequency trading (HFT) is a type of algorithmic financial trading characterized by high speeds, high turnover rates, and high order-to-trade ratios that leverages high-frequency financial data and electronic trading tools. While there is no ...

and the spread of

artificial intelligence Artificial intelligence (AI) is intelligence—perceiving, synthesizing, and inferring information—demonstrated by machines, as opposed to intelligence displayed by animals and humans. Example tasks in which this is done include speech re ...

in today’s markets.

Background

Patterson began writing ''The Quants'' in 2008. He was first exposed to the quantitative analysis

investment strategies In finance, an investment strategy is a set of rules, behaviors or procedures, designed to guide an investor's selection of an investment Portfolio (finance), portfolio. Individuals have different profit objectives, and their individual skills make ...

while covering the

financial industry Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, ...

for the ''

Wall Street Journal ''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...

''. 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 Poker is a family of comparing card games in which players wager over which hand is best according to that specific game's rules. It is played worldwide, however in some places the rules may vary. While the earliest known form of the game w ...

match between Wall Street's hedge fund managers, comparing their trading styles to their poker strategies. It focuses on, among other things, the 2007

subprime mortgage crisis The United States subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the Financial crisis of 2007–2008, 2007–2008 global financial crisis. It was triggered by a large decline ...

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. 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 Edward Oakley Thorp (born August 14, 1932) is an American mathematics professor, author, hedge fund manager, and blackjack researcher. He pioneered the modern applications of probability theory, including the harnessing of very small correlatio ...

; Pete Muller from

Morgan Stanley Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...

's hedge fund; Ken Griffin from Chicago's

Citadel LLC Citadel LLC (formerly known as Citadel Investment Group, LLC) is an American multinational hedge fund and financial services company. Founded in 1990 by Kenneth C. Griffin, it has more than $50 billion in assets under management . The company ...

;

James Simons James Harris Simons (; born 25 April 1938) is an American mathematician, billionaire hedge fund manager, and philanthropist. He is the founder of Renaissance Technologies, a quantitative hedge fund based in East Setauket, New York. He and his ...

from

Renaissance Technologies Renaissance Technologies LLC, also known as RenTech or RenTec, is an American hedge fund based in East Setauket, New York, on Long Island, which specializes in systematic trading using quantitative models derived from mathematical and statisti ...

; Clifford S. Asness and Aaron Brown from AQR Capital Management; and

Boaz Weinstein Boaz Weinstein (born 1973) is an American hedge fund manager and founder of Saba Capital Management. He rose to prominence at Deutsche Bank in the early and mid 2000s with his credit default swap and capital structure arbitrage trading strategi ...

from

Deutsche Bank Deutsche Bank AG (), sometimes referred to simply as Deutsche, is a German multinational investment bank and financial services company headquartered in Frankfurt, Germany, and dual-listed on the Frankfurt Stock Exchange and the New York Sto ...

Reception

''The Quants'' debuted on ''

The New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...

'' bestseller list.

Jon Stewart Jon Stewart (born Jonathan Stuart Leibowitz; November 28, 1962) is an American comedian, political commentator, and television host. He hosted ''The Daily Show'', a satirical news program on Comedy Central, from 1999 to 2015 and now hosts ''Th ...

featured Patterson as a guest on ''

The Daily Show ''The Daily Show'' is an American late-night talk and satirical news television program. It airs each Monday through Thursday on Comedy Central with release shortly after on Paramount+. ''The Daily Show'' draws its comedy and satire form from ...

'' and described the book as "unbelievable." Patterson was a guest on

NPR National Public Radio (NPR, stylized in all lowercase) is an American privately and state funded nonprofit media organization headquartered in Washington, D.C., with its NPR West headquarters in Culver City, California. It differs from other ...

, 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 Bloomberg may refer to: People * Daniel J. Bloomberg (1905–1984), audio engineer * Georgina Bloomberg (born 1983), professional equestrian * Michael Bloomberg (born 1942), American businessman and founder of Bloomberg L.P.; politician and ma ...

BusinessWeek ''Bloomberg Businessweek'', previously known as ''BusinessWeek'', is an American weekly business magazine published fifty times a year. Since 2009, the magazine is owned by New York City-based Bloomberg L.P. The magazine debuted in New York City ...

Scientific American ''Scientific American'', informally abbreviated ''SciAm'' or sometimes ''SA'', is an American popular science magazine. Many famous scientists, including Albert Einstein and Nikola Tesla, have contributed articles to it. In print since 1845, it i ...

Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...

, and

Minyanville Minyanville Media, Inc. was an Internet-based financial media and publishing company. Investment/business articles and broadcasts were available directly on its website, and via licensing agreements with major financial websites that include Y ...

References

External links

* * * * {{DEFAULTSORT:Quants, The Books about traders 2010 non-fiction books Business books Finance books Debut books

Background

Synopsis

Reception

See also

References

External links