Sunday, February 07, 2010

Solve for X

I'm a practical guy. I typically don't much see the point of doing something solely for the sake of doing it. For me, the endeavor has to have an ultimate purpose or better yet, use. For example, it would not be very satisfying to me to simply invent a mathematical formula in pursuit of such abstract qualities as elegance, symmetry, or beauty only. I would be much happier developing such an equation whose invention might solve some real world problem like perhaps predicting how a particular stock might perform or how the market might behave over time. Ed Thorp is also such a person. So much so, that he is credited as being the first person to use mathematics to win big at black jack. However, Ed Thorp was not content to limit himself to a life time of counting cards in casinos. His ambitiousness led him to develop similar equations and formulas in an effort to remove, restrict, or hedge against the uncertainty of the stock market. Unsurprisingly, Ed Thorp is also credited with having created one of the first hedge funds.

In a new book entitled, The quants : how a new breed of math whizzes conquered Wall Street and nearly destroyed it, author Scott Patterson introduces use to Thorp, as well as to a new breed of stock brokers who relied on empirical data versus intuition to guide them to great fortunes and financial ruin.

Books by Ed Thorp:

Beat the dealer: a winning strategy for the game of twenty-one: a scientific analysis of the world-wide game known variosly as black jack, twenty-one, vingt-et-un, pontoon, or van-john

Beat the market; a scientific stock market system

Similar titles:

Confessions of a Wall Street analyst : a true story of inside information and corruption in the stock market

Blood on the street : the sensational inside story of how Wall Street analysts duped a generation of investors

Stock market wizards : interviews with America's top stock traders

The pied pipers of Wall Street : how analysts sell you down the river

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