King Rat (gkr) wrote,
King Rat
gkr

A Mathematician Plays the Stock Market, by John Allen Paulos

John Allen Paulos does for statistics what Stephen Hawking did for theoretical physics for the masses. Paulos takes a seemingly complex field and makes it understandable, and sometimes even usable. I own two of his previous books, A Mathematician Reads the Newspaper and Once Upon a Number. So when I browsed through the economics section at Barnes and Noble this weekend and came upon his latest book, I knew I had to buy it.

In this book, as the title suggests, Paulos focuses on the stock market. He bought into Worldcom and lost money on it. He uses his own investment and his own psychology to illustrate the vagaries of the market. For anyone who espouses any economic theory, be prepared to have your sacred cows slaughtered. Paulos ridicules such techniques as technical analysis (widely covered in Investor's Business Daily, which I stopped subscribing to last week for it's overemphasis on the technique). But he also shows some of the fallacies in more fundamental analysis of companies used successfully by such investor's as Warren Buffet. His central tenet throughout the book is this: the supposed advantages of most techniques could just as easily be the product of luck as it could be of innate skill. And he backs it up as well.

A large percentage of his book is devoted to examples and game theory. I won't go into it here, but watch gkr and I might include a few of them as well as how I can see these things applying. If nothing else, they are fun.

Tags: books
Subscribe

  • I Win Con or Bust - 2012

    One of my favorite charity efforts is Con Or Bust, which, in association with the Carl Brandon Society, sends fans of color to science fiction…

  • Unfinished books meme

    According to Kim these are the top 106 most unfinished books according to LibraryThing. Bold are the ones I've read. Strike-through indicates I…

  • ARC haul

    Got a haul of Advance Reading Copies of books today. Normally, when the Random House rep comes by, there's one or two I want. Today he brought a…

  • Post a new comment

    Error

    Anonymous comments are disabled in this journal

    default userpic

    Your reply will be screened

  • 7 comments