The Quants is a fantastic, well-written book that details the impact of quantitative trading and the people driving those strategies on the 2008 Financial Crisis. A must-read for anyone interested in the movements of the Markets in the computer age.
A few takeaways – more big picture vs. detailed insights
1. Networks and connections are important to success – many of the leaders of the Quant Trading movement came from similar institutions…including the University of Chicago.
2. Luck matters – but when the table is tilted your way, push a risk adjusted number of chips in
3. How can you benefit from herd mentality, from fear? Be bold and take risks but always leave yourself an out or liquidity.
4. Belief in models is great – but Occam’s razor does apply. Step back and look at the big picture.
6. The crowd doesn’t imply accuracy – but timing matters.