The Predictors: How a Band of Maverick Physicists Used Chaos Theory to Trade Their Way to a Fortune on Wall Street

by Thomas A. Bass

Book Overview

Excerpted in The New Yorker and hailed by the business press, The Predictors is destined to become a classic of its generation--an antic, subversive odyssey into a universe defined by the mystical convergence of physics and finance.

How could a couple of rumpled physicists in sandals and Eat-the-Rich T-shirts, piling computers into an adobe house in Santa Fe, hope to take on the masters of the universe from Morgan Stanley?...

• Format: Paperback
• Language: English
• ISBN: 0805057579
• ISBN13: 9780805057577
• Release Date: November 2000
• Publisher: St. Martins Press-3PL
• Length: 320 Pages
• Weight: 0.81 lbs.
• Dimensions: 0.9" x 5.5" x 8.5"

Customer Reviews

Full of adventure

Interesting adventures, better than the Hardy Boys! On one page Doyne's replacing the differential in his old van in the desert, several pages later he's suited up (unwillingly, presumably) dueling intellectually with the experts at Goldman-Sachs. In between he's writing checks to keep the fledgling company alive. Like I said, beats Hardy Boys hands down! Bass includes a good description of neo-classical economics ideas, still widely believed by many economicsts far and wide, as in the case of the failed LTCM, not to mention Enron, the IMF, world Bank, and US advisors to Mexico, Argentina, Brazil, thailand, Russia, .... . Significantly, LTCM was guided in part by two Nobel Prize winning neo-classical economists who characteristically proceded implicitly as if there would be 'springs' in the market to enforce the 'no arbitrage' assumption at long (but not too-long...) times. I personally don't believe that the future can be forecast reliably, but then according to a member of The Company they found a small (few %) advantage and sold it to UBS. A gambler with a small bankrole would suffer the gamblers' ruin while trying to bet on such weak correlations. Actually, the hat on the cover looks vaguely familiar, but then what's in a hat?

A great story

A great story. It inspired me to create my own web-site (www.stocklift.com) implementing what is called "pairs trading" in the book, which is using the influence of one stock on another.Of course, there is nothing specific in thee book about the systems they invented - Swiss Bank paid a few hundred million dollars for that, so I had to fill in the blanks by myself.But the book is worth itself as a narrative of a modern self-funded research effort.

A wonderful overview of a startup and prediction

It was great. While, I'd have loved to have gotten a cook book on what the do. From the issues of how to split up the pie in a startup, to market data always has wrong numbers in it, and what they faced, and what technologies they looked at.If you've ever considered applying your knowledge of Time Series Analysis, Chaos, or Neural Nets to the financial markets, this book will prove to be either a humbling experience or help you looks at areas you might not be thinking about.A biblogrophy would have been great, but there are lots of references to books and papers thruout the text.

Absorbing and well-written

Bass can't write books fast enough to keep this reader happy. Whatever the topic he tackles, be it science in Africa or computers in Santa Fe, his lively, well-informed writing turns complex topics into accessible, absorbing--and entertaining--reads. Not one with much interest in the stock market, I nonetheless found this a page-turner. Thumbs up, Mr. Bass.

Takes one to know one!

This book is an excellent study of how difficult it is for a group of academics to start a business. Although, one needs to be a physicist or engineer to understand much of the conversation in the book, the realities of what start-up's go through, the capital raising and the adventure of it are enthralling. As is the cold fresh water on the face of an academic trying to pitch Wall Street! This book isn't detailed as the techniques used to determine trends and forecast the markets is proprietary and isn't about to be published, but it offers hints as to what is possible. A must read for every quant and quant wanna-be who thinks about starting their own firm!