Gregory Zuckerman – The Man Who Solved The Market (2019)
Een reconstructie van de opkomst van computermodellen in de aandelenmarkt. De auteur schrijft soms wat technisch, maar de persoonlijke verhaallijnen maken dat het boek allerminst ‘droog’ wordt. Goed leesbaar voor iemand zonder enige kennis van de beurs.
Bad ideas is good, good ideas is terrific, no ideas is terrible
The world of mathematics is more competitive than most realize. Mathematicians usually enter the field out of a love for numbers, structures, or models, but the real thrill often comes from being the first to make a discovery or advance.
Popular math tools and risk models are incapable of sufficiently preparing investors for large and highly unpredictable deviations from historic patterns – deviations that occur more frequently than most models suggest.
What you are really modeling is human behavior. Humans are most predictable in times of high stress – they act instinctively and panic. Our entire premise was that human actors will react the way humans did in the past.
“No one ever made a decision because of a number. They need a story.”
How the firm wagered was at least as important as what it wagered on. If they discovered a profitable signal, it spread its buying out throughout in unpredictable ways, to preserve its trading signal.
“One of the most important goals of government-financed research is not so much to get answers as it is to consume the computer budget”
In late August 2018, shares of a small cancer-drug company soared 25 percent after its partner, Johnson & Johnson, posted a job listing. The opening suggested that a key regulatory decision for a drug the two companies were developing might be imminent, a piece of news that escaped all but those with the technology to instantly and automatically scour for job listings and similar real-time information.
There will likely remain pockets of the market where savvy traditional investors prosper, especially those focused on longer-term investing that algorithmic, computer-driven investors ten to shy away from
It’s not clear any expert or system can reliably predict individual stocks, at least over the long term, or even the direction of financial markets. What Renaissance does, is try to anticipate stock moves relative to other stocks, to an index, to a factor model, and to an industry.