| The Quants How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It | |
| 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.[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]
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]
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]
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."[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]