Tuesday, December 10, 2019

The Man Who Solved The Market

A bunch of math nerds got to work looking for short-term inefficiencies in the market, and they found some. The Medallion Fund has realized absolutely absurd returns over the last couple of decades. The Man Who Solved the Market tells its story.

I'm not a huge believer in the idea that markets are efficient, but I had no idea there were/are so many short-term (i.e. less than a day, in many cases quite a bit less) inefficiencies that could still be exploited. Kudos to the brilliant mathematicians behind the fund that not only found the inefficiencies, but also managed to continuously exploit them in the face of what is likely brutal competition.

The principals behind this fund have become obscenely rich, of course, leading to an interesting political side story. It definitely does not seem like a good thing for the country that the rich wield such disproportionate political power.

My only criticism of the book is that there were too many characters introduced. I did not need to read the backgrounds and family histories of these guys, as by the next chapter I had forgotten them anyway!

I highly recommend the book if this topic interests you.

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