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The Physics of Wall Street
286 pages, 2013
economics & politics
987 books
business & management
1082 books
history
999 booksIn The Physics of Finance, James Weatherall shows us how the world’s leading thinkers in finance have borrowed from physics to find answers that common sense cannot provide. He introduces us to the physicists who helped create derivatives and the economists who used models to measure risk, as well as the mathematicians and computer scientists who developed modern quantitative techniques.
How does momentum work? Using market prices and statistical tests, Weatherall explains how to build momentum stockpiles and hedge them against black swan events. Is there a property bubble in Los Angeles? Using satellite images on Google Earth, Weatherall shows how one can test for correlation between housing prices—and determine which ones are overpriced. What is money?
Here we follow the distinguished research of Nobel Laureate Wassily Leontief into how countries trade with one another by moving goods, services, capital, and money back and forth through their borders. The Physics of Finance will appeal to scholars as well as anyone interested in financial markets or technology investment, including arbitrage traders, analysts, regulators, and entrepreneurs seeking new ideas in banking.
In 'The Physics of Wall Street', James Owen Weatherall explores the fascinating intersection of physics and finance. He shows how physicists have used their scientific knowledge to revolutionize the financial industry. It's a great read if you're interested in how science can be applied in unexpected ways.
Weatherall emphasizes the power of mathematical models in predicting financial markets. He explains how these models, originally developed for understanding physical phenomena, can be used to predict market trends. If you're into numbers and predictions, you'll find this aspect of the book particularly intriguing.
The book also highlights the significant role physicists play in Wall Street. Weatherall shares stories of physicists who have made a big impact in finance, showing that the skills and knowledge from physics can be transferred to the financial world. It's a great reminder that your skills can be applied in many different areas.
While mathematical models can be powerful, Weatherall also warns about the risks of relying too heavily on them. He discusses how overconfidence in models can lead to financial disasters. This part of the book is a great reminder to always question and test our assumptions.
Finally, 'The Physics of Wall Street' takes a look at the evolution of financial models. Weatherall traces the history of these models, showing how they have changed and improved over time. If you're interested in the history of finance and how it has evolved, you'll definitely want to check out this part of the book.
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