IIF: Black Scholes; More Money Than God

	dwhunter10	0
	Hi Cale, Gurufocus has links to a great video discussing the Black Scholes option model as well as Long Term Capital Management. Having read "When Genius Failed" recently, the video does not emphasize enough the crazy leverage that LTCM had taken on prior to blowing up. http://www.gurufocus.com/news.php?id=114978 ....and here is the YouTube link to the first one in the series: http://www.youtube.com/watch?v=o_UxB6EEqWo&feature=player_embedded Being an engineer, and working in a building full of engineers, (...nerds) the eerie similarity to the opening scene in "The Fellowship of the Ring" did not go unnoticed. Beyond the obvious similarities of music and narration, there is an underlying warning about a power too great wield and its unintended consequences. http://www.youtube.com/watch?v=wJ2DVQxdZLI The video link is timely as I am currently reading "More Money Than God" which is an interesting account of some of the major hedge fund players beginning with Alfred Winslow Jones. Especially interesting are the glimpses into the thinking, psychology, and 'feel' of people like Paul Tudor Jones, Michael Steinhart, and George Soros vs. the intricate, quantitative method of LTCM and widely employed later by the Quants. The biggest takeaways for me are how each person described found a way to exploit some inefficient aspect of the market, and how the golden rope of leverage can become a hangman's noose just as easily as it can slingshot someone into stardom. http://www.amazon.com/More-Money-Than-God-Making/dp/1594202559
	Wed, Nov 24 '10 at 9:20AM EST	Post 1 • IP

	kporeilly7	0
	Great stuff. Thanks, Dustin. For the first time in a long time, yesterday I found myself leaving for the airport without a plan for what I was going to read in-flight. At the last minute I grabbed When Genius Failed and decided to have another go at it. I loved it the first time around, and it's perhaps even more interesting now, given more recent events. I'll add More Money Than God to the list. Kevin
	Wed, Nov 24 '10 at 2:26PM EST	Post 2 • IP

	calesmith	0
	Thanks, Dustin! I confess I've been reading Matt Taibbi's latest, too, Griftopia. Bombastic but highly entertaining. Happy Thanksgiving, guys. Cale
	Wed, Nov 24 '10 at 10:16PM EST	Post 3 • IP

IIF: Black Scholes; More Money Than God17