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Daily Archives: October 31st, 2009

I read Rishi K Narang’s Inside the Black Box, The Simple Truth About Quantitative Trading, as a person who has many, many years working with gigantic amounts of economic and financial data with the specific purpose of forecasting future outcomes.

This book is a must read for those who want an insight into the world of “high finance”. Well written, simple, clear and does not require an understanding of the mathematics of finance. He lays out the how and why of quant trading, in non-technical term, that allows all of us to appreciate that quants are here to stay. Financial services cannot do without quants, just as much as we cannot do without markets.

Valuable to both newbies and seasoned statistical modelers such as myself who have not been directly involved in trading. He points to sources of errors in financial strategies in both the quant and non-quant world. I particularly liked that he had pointed to the problems with correlations.

Narang provides an insight into the world of quants. He explains how and why quants implement strategies and the choices available to them. That at a high level there are a limited set of strategies – one can count on one hand – but at the detail level the number of choices explode.

Reading this book told me that Narang was not just another quant. He is a quant who is always asking the question, how can we build a good model with this data? As it is one thing to build a model but quite another to dig deep into the data to find out why it ticks.


Disclosure: I’m a capitalist too, and my musings & opinions on this blog are for informational/educational purposes and part of my efforts to learn from the mistakes of other people. Hope you do, too. These musings are not to be taken as financial advise, and are based on data that is assumed to be correct. Therefore, my opinions are subject to change without notice. This blog is not intended to either negate or advocate any persons, entity, product, services or political position.