New Book: The Physics of Wall Street by James Weatheralll

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Random Walker
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New Book: The Physics of Wall Street by James Weatheralll

Post by Random Walker » Thu Jan 24, 2013 5:06 pm

Ive read about a quarter of this new book and have found it very enjoyable and educational. It is history of sorts of the incorporation of quants into the investing world. Thumbing through the index, lots of people and subjects are covered: random walk, Burton Malkiel, Sharpe, Fama, Mandelbrot, fat tails, long term capital management, Taleb, just to name a few. I really enjoy the author's easygoing clear style. So far I'm getting a bit of a history lesson on how non-normal the distribution of returns is and how long this has been known. So far I recommend the book highly. Any one else read it and have thoughts?

Dave

umfundi
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Re: New Book: The Physics of Wall Street by James Weatherall

Post by umfundi » Thu Jan 24, 2013 8:11 pm

Random Walker wrote:Ive read about a quarter of this new book and have found it very enjoyable and educational. It is history of sorts of the incorporation of quants into the investing world. Thumbing through the index, lots of people and subjects are covered: random walk, Burton Malkiel, Sharpe, Fama, Mandelbrot, fat tails, long term capital management, Taleb, just to name a few. I really enjoy the author's easygoing clear style. So far I'm getting a bit of a history lesson on how non-normal the distribution of returns is and how long this has been known. So far I recommend the book highly. Any one else read it and have thoughts?

Dave
I have not read it.

http://www.nytimes.com/2013/01/06/books ... .html?_r=0

But, let me add that Wall Street is not governed by the laws of physics, and that economic or investing theories are not provable by the Scientific Method.

http://en.wikipedia.org/wiki/Scientific_method

Nonetheless, the mathematics developed for physical systems has been applied by some to their great advantage on Wall Street.

Keith
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Kevin M
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Re: New Book: The Physics of Wall Street by James Weatherall

Post by Kevin M » Thu Jan 24, 2013 8:24 pm

Thanks for the recommendation RW; just put it on hold at the library.

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Re: New Book: The Physics of Wall Street by James Weatherall

Post by NAVigator » Thu Jan 24, 2013 8:57 pm

Kevin M wrote:Thanks for the recommendation RW; just put it on hold at the library.

Kevin
Thanks the the recommendation. I was about to click to get the Kindle edition when I saw this. Thanks to Kevin, my library will get it from a neighboring town. Nothing like saving money to motivate some financial reading!

Jerry
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555
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Re: New Book: The Physics of Wall Street by James Weatherall

Post by 555 » Thu Jan 24, 2013 9:17 pm

Is the book full of formulas?

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Re: New Book: The Physics of Wall Street by James Weatherall

Post by larryswedroe » Thu Jan 24, 2013 10:01 pm

The book is fabulous IMO. Extermely well written and easy to read
Larry

Random Walker
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Re: New Book: The Physics of Wall Street by James Weatherall

Post by Random Walker » Thu Jan 24, 2013 11:55 pm

No formulas really. So far just a few diagrams comparing normal distribution to other slightly different types of distributions with fatter tails. I've read Mandelbrot's Misbehavior of Markets before where he describes self similarity, fractals, and their application to markets. This book does an excellent job of summarizing that information,incorporating into graphical distributions, and comparing those graphs to normal distributions. Not really mathematical at all; just enough graphs to make things clear. What I really like about the book is the clarity, interesting descriptions of the characters, and the way the history just seems to naturally flow from the book. I am not much of a history fan at all, but this book is truly enjoyable.

Dave

555
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Re: New Book: The Physics of Wall Street by James Weatherall

Post by 555 » Fri Jan 25, 2013 3:39 am

Random Walker wrote:"No formulas really."
That's a pity. :(

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Don Christy
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Re: New Book: The Physics of Wall Street by James Weatherall

Post by Don Christy » Fri Jan 25, 2013 12:53 pm

umfundi wrote:
But, let me add that Wall Street is not governed by the laws of physics, and that economic or investing theories are not provable by the Scientific Method.
EVERYTHING is governed by the laws of physics. :oops:
“Speak only if it improves upon the silence." Mahatma Gandhi

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Bylo Selhi
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Re: New Book: The Physics of Wall Street by James Weatheralll

Post by Bylo Selhi » Wed Feb 08, 2017 11:50 am

No longer a "new" book but still worth reading.

Weatherall was in town last week and gave a lecture at Perimeter Institute for Theoretical Physics.

That lecture is now available online: The Physics of Wall Street

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Re: New Book: The Physics of Wall Street by James Weatherall

Post by inbox788 » Wed Feb 08, 2017 1:04 pm

Don Christy wrote:
umfundi wrote:
But, let me add that Wall Street is not governed by the laws of physics, and that economic or investing theories are not provable by the Scientific Method.
EVERYTHING is governed by the laws of physics. :oops:
"A human studying atoms is really just atoms trying to understand themselves"

The mind, spirit, and psychology are yet to be well modeled by physics. And the psychology of wall street is still a very significant factor.

Tom1320
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Re: New Book: The Physics of Wall Street by James Weatheralll

Post by Tom1320 » Wed Feb 08, 2017 2:40 pm

Thanks for posting the link to the presentation. I read the book about six months ago. I like that he stresses all models are dependent on the assumptions they are based on and the proper use of a model requires knowledge about how those assumptions can change.
"And this, too, shall pass away." How much it expresses! How chastening in the hour of pride! How consoling in the depths of affliction! - Our 16th President

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Re: New Book: The Physics of Wall Street by James Weatherall

Post by One Ping » Wed Feb 08, 2017 9:13 pm

inbox788 wrote: "A human studying atoms is really just atoms trying to understand themselves"
Or, as Carl Sagan said:
"We are a way for the cosmos to know itself."

One Ping
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