Quants: The Alchemists of Wall Street
- Thread starter Amaan
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Could you elaborate more on your comment? Don't you think most of the MFE seeking students (if not others) will find something to learn in this video?
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The only new thing this showed me was how Emanuel Derman sounded.
Now see...why can't most professors speak like him? Clear, coherent, only slightly accented English.
Now see...why can't most professors speak like him? Clear, coherent, only slightly accented English.
The problem is that people aspired to get into quant areas without sheer economic knowledge. Mathematics alone can't solve real world problems because it caused by human elements. In addition, the ego and greed.....
You can tell from many quant forums, people tend to think their own ways and think they are the super set and other are subset.
You can tell from many quant forums, people tend to think their own ways and think they are the super set and other are subset.
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Quants: The Alchemists of Finance
I don't know if this video has been posted before; if it has, Andy can remove this post.
Both Derman and Wilmott point out that quant finance is not physics. Wilmott points out models can be used to camouflage risk, or to make financial decisions and actions appear grounded in, or justified by, difficult-to-understand quant theory. And that unlike physics, we don't have laws in economics and finance -- just frameworks that come and go. Derman, in like fashion, points out we can't use mathematical models to understand finance (as we can in physics), though they may be of some fleeting use.
Derman also points out that quant models are not responsible for the financial/economic crisis -- the roots of the crisis lie in long-term oscillatory swings, gradually growing greater in volatility, leading to periodic crises, with each crisis being tackled by an infusion of ever-greater sums of cheap money. Talking along analogous lines, Mike Osinski points out that it was political and bank policy decisions that led to making subprime mortgages available; the math models were not the driver of decisions (though they may have been used as dubious justification for such).
All three -- Derman, Wilmott, Osinski -- make clear that finance is more than just quant math and modeling, and that legitimate questions can be raised about just how successful or applicable quant work can be. This ties in neatly with an essay by Sylvain Raynes a couple of years back questioning what exactly the raison d'etre of financial engineering programs is (other than minting money off gullible students). As Raynes makes clear, if FE programs are focused merely on solutions to the Black-Scholes equation, with a smattering of stochastic calculus, and some fluff material thrown in to justify the length of a typical program, how useful are they to students who want to make their way into finance and indeed will it help them in structuring and making deals? Or in my (BBW) words, if people want to be box girls and not fluff girls.
I don't know if this video has been posted before; if it has, Andy can remove this post.
Both Derman and Wilmott point out that quant finance is not physics. Wilmott points out models can be used to camouflage risk, or to make financial decisions and actions appear grounded in, or justified by, difficult-to-understand quant theory. And that unlike physics, we don't have laws in economics and finance -- just frameworks that come and go. Derman, in like fashion, points out we can't use mathematical models to understand finance (as we can in physics), though they may be of some fleeting use.
Derman also points out that quant models are not responsible for the financial/economic crisis -- the roots of the crisis lie in long-term oscillatory swings, gradually growing greater in volatility, leading to periodic crises, with each crisis being tackled by an infusion of ever-greater sums of cheap money. Talking along analogous lines, Mike Osinski points out that it was political and bank policy decisions that led to making subprime mortgages available; the math models were not the driver of decisions (though they may have been used as dubious justification for such).
All three -- Derman, Wilmott, Osinski -- make clear that finance is more than just quant math and modeling, and that legitimate questions can be raised about just how successful or applicable quant work can be. This ties in neatly with an essay by Sylvain Raynes a couple of years back questioning what exactly the raison d'etre of financial engineering programs is (other than minting money off gullible students). As Raynes makes clear, if FE programs are focused merely on solutions to the Black-Scholes equation, with a smattering of stochastic calculus, and some fluff material thrown in to justify the length of a typical program, how useful are they to students who want to make their way into finance and indeed will it help them in structuring and making deals? Or in my (BBW) words, if people want to be box girls and not fluff girls.
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bbw,
It's been posted 8 months ago. I merged the two threads.
It's been posted 8 months ago. I merged the two threads.
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