The Predictors: How a Band of Maverick Physicists Used Chaos Theory to Trade Their Way to a Fortune on Wall Street | 
 enlarge | Author: Thomas A. Bass
Publisher: Holt Paperbacks
Category: Book
List Price: $16.00
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Rating:  39 reviews
Sales Rank: 257932
Media: Paperback
Pages: 320
Number Of Items: 1
Shipping Weight (lbs): 0.7
Dimensions (in): 8.3 x 5.5 x 0.9
ISBN: 0805057579
Dewey Decimal Number: 332
EAN: 9780805057577
ASIN: 0805057579
Publication Date: November 1, 2000
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Condition: Ships immediately! Perfect and New! Has a publisher remainder mark. Reprint. 2000 Paperback.
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Amazon.com Review
Using a computer to beat Wall Street from afar is, arguably, the new American dream. While it will remain just that for most of us, an offbeat gang of academics turned financial wizards is showing it can be done. Led by acclaimed physicists Doyne Farmer and Norman Packard, the Santa Fe-based Prediction Company has proven since its 1991 founding in an adobe bungalow furnished with plastic lawn chairs and top-of-the-line Sun workstations that it is indeed possible to make millions in the world's financial markets by anticipating trends and developing software that automatically capitalizes on them. In The Predictors, Thomas A. Bass colorfully relates their tale of fiscal triumph--and reveals in the process how even an unorthodox group of antibusiness intellectuals in far-off New Mexico can make the world's biggest institutions sit up and take notice. Long esteemed in the scientific community, Farmer and Packard have become legendary in hacker circles since their failed attempt to beat the roulette tables in Las Vegas with toe-operated computers was chronicled in Bass's well-regarded 1985 book called The Eudaemonic Pie. This time, though, the two hit the jackpot with their cutting-edge computer programs and the company they created to trade German marks, Chicago commodities, Japanese treasury bonds, Texas oil futures, and New York securities. Bass's prose is a bit flowery at times, but his perceptive you-are-there account is nonetheless entertaining and sure to cement the pair's reputation as today's ultimate masters of "phynance," the successful, and now oft-copied, merger of physics and finance. --Howard Rothman
Product Description
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? Doyne Farmer and Norman Packard may never have read The Wall Street Journal, but they happen to be among the founders of the new sciences of chaos and complexity. Who better to try to find order in the apparently unreasoned chaos of the global financial markets? Thomas A. Bass takes us inside their start-up company, following it from its inception as a motley collection of longhaired Ph.D.s to its passage into the centers of financial power, where "the predictors" find investors and finally go live with real money. The Predictors is a dizzying, often hilarious tale of genius and greed.
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| Customer Reviews: Read 34 more reviews...
 not what I expected November 23, 2008
Barbara Swanson (Gresham, Oregon United States)
0 out of 1 found this review helpful
I was expecting help as a new person wanting to learn investment and possibly trading. Morally and ethically, I couldn't warm up to the utter lack of foresight or responsibility of clever market manipulation to "win at any cost". A distorted morality of a group of mavericks that set the tone for the current economic ailment. When does amoral become immoral. I burned the book rather than risk its recycling for someone to be inspired & motivated by its utter lack of respect for human kind just for the sake of "can it be done"! I spoze the only just outcome would be to know what they are doing with their fortunes - - - and hope they are giving to GOOD like Gates & Buffett, et al!
 Valuable to a niche group April 21, 2008
Mikhail L. Kopytine (Moscow, Russia)
To quote: "They begin an animated discussion about some of the basic ideas that will later be used at Prediction Company. The technique involves fitting functions to time series. Imagine a stream of data, a record of daily sunspot activity, for example. The sunspot activity on two successive days is two numbers, which can be represented as points in a plane. The sunspot activity on the next day can be thought of as a point suspended above this plane. The picture of sunspot activity for a year will be a cloud of points in three dimensional space. To make a forecasting model, one fits a surface, like a rumpled sheet, through this cloud of data. If the sheet fits in close proximity to all the data points, it will be a good model. Forecasts are made by stretching the sheet into regions where additional data points will be recorded when the future rolls into the present". The idea is in the air... This description is recognisable to someone who has independently arrived at something similar -- but probably not informative to the rest. Here at we would not entrust an extrapolation of an analytical fit (no matter how non-linear) with anybody's money -- what you want to do is data compression of some sort, and there are more conservative compression tools than a fit. One may also object to the business model of striking an exclusive deal with a single large client, as opposed to marketing the service to thousands of individual traders. Overall, valuable historic reading to someone with similar interests.
Light reading for those with an interest in quant trading January 3, 2008
Hedge Fund Voyeur (USA)
I read this book as part of research into quantitative trading hedge funds in order to get some insight into a group of early players. The book is actually quite well written (obviously devoid of any useful information for easily building your own models!) and highlights both the personal and practical elements of starting a hedge fund with little prior financial experience but with an idea (that has been shown to be quite lucrative if not failsafe in a post 8/07 world).
A fun book that is also useful for understanding some of the issues and history of quant trading. Prediction Company still exists, though without any of the colorful founders, and has spun off some interesting hedge funds.
 boring,,,i dont care about the weather June 7, 2006
Barrier Options (London School of Economics)
3 out of 5 found this review helpful
this book could be better, but the author is giving too much details of some unnecessary objects, like describing the weather and shape of the chin of someone or what sandwich some unrelated guy is eating and what underwears they like for 2 paragraphs. suddenly he jumps to talk about the history of sante fe and the Zozoba a couple of times which i still dont know what the heck is it.
i got so irritated readin about the excessive writings on completely unrelated objects and subjects that i paid less attention even when he is talking about the related characters.
after all the mental abuse, we are left with nothing about how the adventure eventaully goes...REFUND!Not a recommended read, skip!
Required Reading Before Trying to 'Beat the Market' January 31, 2006
Hawkeye Richardson (Tucson, AZ)
3 out of 7 found this review helpful
With over 80,000,000 Americans investing in the stock market, many believe that they can quickly and easily go in and 'out-think' all those other traders who "just aren't as smart as I am." Well, before you go in and compete against the big boys, you might want to read this book to get a good understanding of who and what you are competing against.
There is an old saying that goes "It doesn't take a rocket scientist to figure this out." Yeah, well, maybe not. But, when you try to outwit the market, you better realize that you are competing against rocket scientists, and physicists, and mathematicians who attack the market in ways the average investor can't even comprehend. Yet, that is who you compete against in the market.
This book tells the story of a group of physicists and their friends who set out to build an automated trading system that would rule the market. Did they succeed? Well, I wouldn't want to give away the ending. But, needless to say, before you jump into the stock market and get your ego and pocketbook devastated, you might want to read about how difficult it is to 'rule the market' even when you have some of the best brains in the US tackling the problem with resources that you and I will never have.
This book should be required reading before a person can invest in the stock market.
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