Reading finance

Last week, out of sheer enthu, I picked up that xerox copy of Paul Wilmott on Quantitative Finance which was lying torn and dusty in a remote corner of my bedroom, cleaned it and started reading it. I glossed over some of the derivations, ignored the quantitative part of this quantitative book, and found it to be an excellent read. The guy has explained things really well and the book has this nice flowing style, that is so often absent in text books. Some insights

  • I still throw a fit when I see the integral sign, unless of course a polynomial is being integrated. And go numb when I see a differential equation. I wonder how I’d handled them seven years ago
  • I’m still pretty good at probability and basic statistics
  • I’ve managed to “learn back” all that I’d learnt during my internship at J P Morgan, Yes, I remember everything. While I was reading the book, I felt like a guy who’s suffering from amnesia and who is slowly remembering incidents of the past
  • I’m still pretty good at understanding derivatives. I may be thoroughly incapable at the complicated models that are used to price them, but I’m pretty good at the fundamentals, and the idea behind most of these things
  • I still get a mighty kick out of reading stuff about complicated financial products or trades. For example, this op-ed by Niranjan Rajadhyaksha left me high for almost the whole of last week
  • I suck at continuous math, and don’t want to ever encounter it
  • The sub prime crisis has helped me immensely in understanding how banks work
  • I’m a “high-level” guy. I don’t have an eye for detail. But I can easily see the big picture
  • I’m sleepy now so most of the things I planned to put here stand forgotten

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