It was just pure coincidence that I stumbled upon this book while doing a random search in LibGen. Good ratings on Amazon.com propelled me to have a glance at it.
The introduction starts with Jim Simons’ journey from being a Mathematics Professor to the chairman of Renaissance Technologies, one of world’s most successful hedge fund. Then it proceeds to talk about influence of Physics and Mathematics to the field of Finance and Investment. It starts with a Chapter on the work of Pascal, Fermat and Bernoulli work on the field of probability and its use in gambling, thereafter proceeding to Bachelior’s work on random walk hypothesis.
In subsequent chapters, it moves to works of Osborne and Mandelbrojt talking about normal distribution, log normal distribution and fat tail Mandelbrojt distribution in asset prices. Afterwards, it moves towards expedition of Thorp and Shannon in the field of gambling theory.
Later on, the journey towards Block Scholes Merton model of option pricing and the usefulness and limitations of it. Finally the book goes towards chaos theory in predicting market crashes and gauge theory predicting inflation.
In the epilogue, the book tries to defend mathematical models and the use of mathematics/physics in the field of finance against the criticism of Nassim Taleb and Warren Buffett.
The first half is really enchanting, second half a bit less so. But still, over all a good read. Recommended for anyone acquainted with the works of Taleb and mathematical model of financial assets.
Goodreads rating : 3.79/5 (1092 Ratings)