The Quants Quotes & Sayings

Price mostly meanders around recent price until a big shift in opinion occurs, causing price to jump up or down. This is crudely modeled by quants using something called a jump-diffusion process model. Again, what does this have to do with an asset's true intrinsic value? Not much. Fortunately, the value-focused investor doesn't have to worry about these statistical methods and jargon. Stochastic calculus, information theory, GARCH variants, statistics, or time-series analysis is interesting if you're into it, but for the value investor, it is mostly noise and not worth pursuing. The value investor needs to accept that often price can be wrong for long periods and occasionally offers interesting discounts to value. — Nick Gogerty

Traders and quants are genuinely different species. Traders pride themselves on being tough and forthright while quants are more circumspect and reticent. These differences in personality are reflections of deeper cultural preferences. Traders are paid to act. All day long they watch screens, assimilate economic information, page frantically through spreadsheets, run programs written by quants, enter trades, talk to salespeople and brokers, and punch keys. It's hard to have an extended conversation with a trader during the business day; it takes an hour of standing around to have five minutes of punctuated repartee. Part of what traders do has a video game quality. In consequence, they learn to be opinionated, visceral, fast-thinking, and decisive, though not always right. They thrive on interruption. Quants — Emanuel Derman

Investors look at economic fundamentals; traders look at each other; 'quants' look at the data. Dealing on the basis of historic price series was once described as technical analysis, or chartism (and there are chartists still). These savants identify visual patterns in charts of price data, often favouring them with arresting names such as 'head and shoulders' or 'double bottoms'. This is pseudo-scientific bunk, the financial equivalent of astrology. But more sophisticated quantitative methods have since proved profitable for some since the 1970s' creation of derivative markets and the related mathematics. Profitable — John Kay