My Life as a Quant Read Online Free Page A

obstacles of scholarly backgrounds, introspective personalities, and hybrid skills.
    One of the theories about what makes an animal nonkosher is that it transcends categories. In the book of Genesis, the creation categorizes animals by both their species and location, referring to “birds of the sky” and “fish of the sea.” Occupying both categories is what makes some animals nonkosher. Shrimp, for example, live in the sea but aren’t fish and don’t swim. Ostriches are birds, but do not fly in the sky. Both are nonkosher. Similarly, cloth made from a mixture of linen (a plant) and wool (an animal product) is also proscribed. Those who were brought up keeping kosher can feel nauseated at the thought of eating category-violating food.
    Quants are the nonkosher category violators of Wall Street, half-breed players who make pure traders or undiluted information technology managers uncomfortable. Quants are amateurs with no clear professional role model. While traders and programmers in investment banks have distinct ladders to climb and clearly marked rungs to ascend, the quant professional ladder is short and often ends in midair.
    Nevertheless, in the twenty-first century, as universities have initiated financial engineering programs and financial institutions have embraced risk management, being a quant has slowly become a more legitimate profession. The overheated tech-stock market of the late 1990s cast a warm, reflected glow on geeks of all types, as did the droves of hedge funds trying to use mathematical models to squeeze dollars out of subtleties. The guts to lose a lot of money carries its own aura. D.E. Shaw & Co., a New York trading house that was rumored to be making substantial profits doing “black box” computerized statistical arbitrage before their billion-dollar losses in 1998, and Long Term Capital Management, the quant-driven Connecticut hedge fund that ultimately needed a multibillion-dollar bailout, have both contributed to this more glamorous view of quantization. And indeed, many of the Long Term Capital protagonists are back in business again at new firms. The capacity to wreak destruction with your models provides the ultimate respectability.
THE SACRED AND PROFANE
    There is an almost religious quality to the pursuit of physics that stems from its transcendent qualities. How does a planet know that it must obey Newton’s Laws, or an electron perceive that it must move according to the principles of quantum electrodynamics? Do tiny internal homunculi program internal nanocomputers to spit out the electron’s next position? It’s hard not to have a sense of wonder when you see that principles, imagination, and a little mathematics—in a word, the mind—can divine the behavior of the universe. Short of genuine enlightenment, nothing but art comes closer to God.
    When I was a graduate student at Columbia in the 1970s, physics was the great attractor for the aspiring scientists of the world. Bearing witness to this was the large box of documents kept near the entrance to the physics department library. We referred to it as the “crank file.”The box contained the unsolicited typewritten letters, manuscripts, and appeals that poured steadily into the mailbox of the department’s chairman. Eccentric though the documents were, they made fascinating reading. There were eager speculations on the nature of space and time, elaborately detailed papers refuting relativity and quantum mechanics, grandiose claims to have unified them, and farfetched meditations that combined physics with more metaphysical topics. I remember one note that tried to deduce the existence of God from the approximate equality of the solid angles subtended by the sun and the moon when observed from the earth, a remarkable circumstance without which there would be no solar eclipses.
    None of these papers had much chance of getting past a journal referee. Few of the writers had