My Life as a Quant is an interesting memoir of a physics Ph.D. whose life path has wound from academia to Bell Labs to Wall Street and now back to academia, as a professor of "financial engineering." It will be of particular interest to those aspire to be quants themselves.
- Insightful discussion of organizational cultures.
- Crisp writing style, with a dry sense of humor.
- Plain-English case studies in financial engineering, with excellent graphs.
- Chronologies of events often become unclear.
- Too much detail on the author's financial modeling projects for many general readers.
- The book needs tightening up, eliminating some digressions.
- Personal memoir.
- Excellent observations on organizational culture and behavior.
- Detailed, plain-English case studies in financial engineering, with excellent graphs, makes a fine intro to the topic.
Emanuel Derman's career has come full circle, starting and ending in academia. Frustrated with low pay and limited future prospects, he quit an academic career in physics in 1980 at age 35 to join AT&T's Bell Labs. Though he earned an immediate 170% raise, he quickly became bitterly disillusioned.
His group at Bell Labs redeployed surplus theoretical physicists into solving business problems. He was frustrated both by their inability to produce anything useful in his 5 years there, and by the Kafkaesque (his word) bureaucracy. I was elsewhere in AT&T at the same time, and also dealt with this same group, though I do not recall meeting Derman. Anyway, his observations mesh with my own. In a year of work, a team of 6 Bell Labs Ph.D.'s failed to deliver any significant enhancement to a system of forecasting models that I had created with a fellow MBA in a mere 2-3 weeks.
Derman left Bell Labs late in 1985, the same time I left AT&T. His next stop was Goldman Sachs, where he soon learned that, unlike academe, Wall Street is impatient with long research projects. Better a quick answer that is directionally correct than a much more precise answer that takes weeks or months. Another huge adjustment was coping with Wall Street's demands for multitasking. Plodding away on just a single project was unacceptable.
One strength of the book is the author's sage observations about organizational culture, and how people work (or don't work) together. This includes how the culture changed at Goldman Sachs as it evolved from a private partnership to a public company with four times as many employees. Particularly harrowing is his account of an ill-advised move to Salomon that turned into a year-long nightmare. Luckily, he had left Goldman on good terms, and was soon hired back. Never burn your bridges.
