"Sifting Hidden Market Patterns for Profit"
By GEORGE JOHNSON
Published: September 11,
1995"In the late 1970's, when Doyne Farmer and Norman Packard were graduate students in physics at the University of California at Santa Cruz, they tried to make their fortune by using miniature computers to beat the roulette tables in Las Vegas, Nev.
Roulette, they reasoned, was not quite so random as commonly believed. With the help of friends and fellow students, they developed a computer program that roughly predicted in which octant of the wheel the spinning ball was likely to land.
Though the scientists' system did not make them wealthy, it showed that it was theoretically possible to get a slight edge over the house. Now, almost two decades later, they are trying to make a much bigger killing by using information technology to outsmart the glitziest casino of them all -- the financial markets. ..."
www.nytimes.com/1995/09/11/business/sifting-hidden-market-patterns-for-profit.html?pagewanted=all&src=pmBUSINESSWEEK ONLINE : DECEMBER 20, 1999 ISSUE
BOOKS
Using Chaos to Make a Bundle
THE PREDICTORS
How a Band of Maverick Physicists Used Chaos Theory to
Trade their Way to a Fortune on Wall Street
By Thomas A. Bass
Henry Holt
"In the chaotic early 1990s, chaos theory was widely heralded as the investment technique that would rescue investors from their reliance on old-fashioned methodology. You know, earnings and stuff. Using computer-driven methods borrowed from physics and--literally--rocket science, chaos theory is supposed to predict the unpredictable. Weather, for example--and the markets. The basis of the theory was the view that ''order must underlie everything, however disorderly it may appear.''..."
www.businessweek.com/1999/99_51/b3660094.htmDECEMBER 1999 © American Institute of Physics
"Physicists Graduate from Wall Street"
"Over the past decade, the number of
Ph.D. physicists employed in the financial
community has increased dramatically.
Once considered something of an anomaly
on Wall Street and in banking, physicists—
and their fellow Ph.D.’s in mathematics,
computer science, and engineering—have
become a critical element to successful
investment strategies, gradually replacing
many employees who lack strong statistical
and analytical backgrounds. Today, quantitative
methods are commonplace on Wall
Street, despite concerns about their predictive
accuracy, and the proliferation of Ph.D.
physicists in financial activities has made
competition for these lucrative positions
more intensive than ever ..."
www.aip.org/tip/INPHFA/vol-5/iss-6/p9.pdf"They Tried to Outsmart Wall Street "
By DENNIS OVERBYE
Published: March 9, 2009
"Emanuel Derman expected to feel a letdown when he left particle physics for a job on Wall Street in 1985.
After all, for almost 20 years, as a graduate student at Columbia and a postdoctoral fellow at institutions like Oxford and the University of Colorado, he had been a spear carrier in the quest to unify the forces of nature and establish the elusive and Einsteinian “theory of everything,” hobnobbing with Nobel laureates and other distinguished thinkers. How could managing money compare? ..."
"The result, as Dr. Derman said, was a pipeline with no jobs at the end. Things got even worse after the cold war ended and Congress canceled the Superconducting Supercollider, which would have been the world’s biggest particle accelerator, in 1993."
"The physicists killed Wall Street"
March 22nd, 2009 3:55 PM
"...The basic idea is that greedy physicists have gone to Wall Street, cooked up all sorts of arcane derivative products, and subsequently unleashed these weapons of mass destruction on the financial markets. This sentiment is best epitomized by a statement from none other than Warren Buffett (perhaps the world’s most successful investor, and certainly the world’s richest): “beware of geeks bearing formulas” ..."
blogs.discovermagazine.com/cosmicvariance/2009/03/22/the-physicists-killed-wall-street/Superconducting Super Collider
"The Superconducting Super Collider (SSC) (also nicknamed the Desertron[1]) was a particle accelerator complex under construction in the vicinity of Waxahachie, Texas that was set to be world's largest and most energetic, surpassing the current record held by the Large Hadron Collider. Its planned ring circumference was 87.1 kilometres (54.1 mi) with an energy of 20 TeV per beam of protons."
en.wikipedia.org/wiki/Superconducting_Super_ColliderComment:
In hindsight it would have been cheaper to build the collider...
Butterfly effect
en.wikipedia.org/wiki/Butterfly_effectBlack swan theory
en.wikipedia.org/wiki/Black_swan_theory