Praise for “Nerds On Wall Street”

“Leinweber isn’t half as crazy as people said! He foresaw the profound change that wired technology would bring to markets (robots trading millions of shares in six milliseconds). Now he nails the Stupid Financial Engineering Tricks that dumped the markets, and offers his patented, sound insights on how the nerds will help bring us back.”

Jane Bryant Quinn,
Financial columnist for Bloomberg.com and Newsweek
Author, “Smart and Simple Financial Strategies for Busy People“

“David Leinweber has been a pioneer in developing and applying advanced technologies in the capital markets. This book is a virtual tour de force survey of many of the key innovations that ‘nerds’ and computational techniques have driven over the past two decades, with key insights on future opportunities in this area. It is a highly engaging, insightful, and entertaining book that will benefit all investors who want to understand the increasingly important role that technology plays in the financial markets.”

Blake Grossman
CEO, Barclay’s Global Investors

“Leinweber leads his readers through a largely unexplored forest, turning over ordinary-looking rocks to reveal hidden colonies of peculiar creatures that feed on moldering mounds of numbers teeming with trailing zeroes. His book is absorbing, instructive, and very, very funny.”

David Shaw
Founder D.E.Shaw & Co.

“Through the lenses of finance “nerds”, Dave Leinweber recounts the quantitative and technological revolution in equity trading. The book is humorously written but it is serious and insightful. It makes an important contribution to our understanding of financial innovation and the evolution of the capital markets.”

André F. Perold
George Gund Professor of Finance and Banking
Harvard Business School

“Finally, a book that rightly honors the pocket-protected, RPN-loving, object-oriented, C-compatible, self-similar Wall Street quant! This is a delightfully entertaining romp across the trading floors and through the research departments of major financial institutions, told by one of the early architects of automated trading and a self-made nerd.”

Andrew W. Lo
Harris & Harris Group Professor
Director, MIT Laboratory for Financial Engineering
MIT Sloan School of Management

“David Leinweber is one of the great financial innovators of our time. David possesses a unique combination of expertise in the fields of money management, artificial intelligence, and computer science.”

Blair Hull
Founder, Hull Trading & Matlock Trading

“An important, accessible, and humorous guide to today’s electronic markets. Like Capital Ideas mixed with Being Digital, as told by Steve Martin.”

Frank Fabozzi
Professor in the Practice of Finance, Yale School of Management
Editor, “Journal of Portfolio Management“

“Most new technologies are exploited first by “alpha geeks,” the folks with the skills to push the envelope. This is as true on Wall Street as it was on the web. David Leinweber was one of those alpha geeks, but is also the first to chronicle the innovation process from early adopter to mainstream acceptance.”

Tim O’Reilly
Founder & CEO O’Reilly Media

“NOWS is a thoughtful, funny and comprehensive history of the overlooked role geeks have played in our financial markets from the earliest days of telegraph, to risk management systems in the current credit crisis. The book is an irreverent “I Was There” chronicle of how our financial markets were formed from silicon, savvy and software. Highly recommended.”

Paul Kedrosky
Infectious Greed
Senior Fellow, Kauffman Foundation
Consulting Strategist, Ten Asset Management

“For decades Dave has not only understood more investment technology than anyone, but with patience and a great sense of humor, he has made the effort to explain it to his less tech savvy friends. Nerds on Wall Street is a home run for us all.”

Richard Rosenblatt
CEO, Rosenblatt Securities

“Nerds on Wall Street is a wild, funny ride though the technological changes that underpin modern financial markets. You will find yourself laughing out loud at what could otherwise be a dry subject. And, if you’re not careful, you might even learn something!”

Richard R. Lindsey
Principal, Callcott Group LLC
Chairman, International Association of Financial Engineers

“If you’re interested in what computers are doing with your money, then this book is for you.”

Richard Peterson MD
Managing Director MarketPsy Capital LLC
Author, “Inside the Investor’s Brain“

“In David’s words, the stock market is a “victim not a cause” of the great mess of 2008. It’s refreshing to read a book with such insight during these difficult times. I applaud David Leinweber for this timely masterpiece.”

Bill Aronin
Co-founder Quantitative Analytics, Inc.
Sr. Manager, Thomson Reuters

“Clear, light language and wry humor mask David Leinweber’s exhaustive compendium of technological innovations for and impacts on asset trading. Leinweber brings an entrepreneur’s experience and an academic’s perspective to financial technology; and has produced the definitive work, as up-to-date as it is encyclopedic.”

David K. Whitcomb
Founder and Chairman Emeritus, Automated Trading Desk
Professor of Finance Emeritus, Rutgers University

“Dr. Leinweber continues to be a patron saint of any nerd who stumbles onto Wall Street. Many of his most insightful ideas are here in this book, the utility of which are only matched by the humor of their presentation. As the markets have changed in 2008, the need to collect, process, and understand novel information sources has never been greater. ”

Jacob Sisk
Infoshock, Yahoo

“Thoughtful insights covering trading, investment practice and system design encased in humor by an expert in all four: a good and practical read.”

Evan Schulman
Founder, Tykhe, LLC

“David is one of the top practitioners in the fields of textual analysis and sentiment and its application to trading. Leveraging “smart” machines to parse and extract signal from massive quantities of textual data is hard, and David’s work has put him at the vanguard of the next wave of alpha generation.”

Roger Ehrenberg
Information Arbitrage
IA Capital Partners

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Wall Street Analytics

• Chapter 10 – Collective Intelligence, Social Media, and Web Market Monitors (Web Market Monitors and the Impact of Social Media on Financial Markets "The words of the prophets are written on the subway walls." — Simon & Garfunkel, The Sound of Silence Opinions vary widely on the value of collective wisdom, with ample supporting evidence both for and against. The Internet has many positive examples: The collective ratings [...])
• Forward by Ted Aronson (Nerds on Wall Street Forward by Ted Aronson Quantitative finance is not a topic usually associated with laughter. That is about to change with the publication of Nerds on Wall Street. I was first exposed to Dave Leinweber’s wit when he delivered a speech entitled “Nerds on Wall Street.” I believe the event happened 20 or 25 [...])
• Part 3 – Artificial Intelligence and Intelligence Amplification (Artificial Intelligence and Intelligence Amplification in Financial Markets Securities Markets are Machinery Now. This raises the question of how to best participate in the world’s new wired markets. People who use information technology most effectively will be rewarded. Artificial intelligence (AI) as an academic discipline began at the famous 1955 Dartmouth conference organized by John McCarthy from Stanford [...])
• Introduction to Nerds on Wall Street (Introduction to "Nerds on Wall Street" I hope people think of this book as sort of a Hitchhiker’s Guide to Wired Markets. There are no robots parking cars for six million years, but there are robots trading millions of shares in six milliseconds, so maybe that’s close enough. In 2006, I got a call from another nerd [...])
• About (David Leinweber is a Haas Fellow in Finance at the Haas School of Business at UC Berkeley, and founding Director of the Center for Innovative Financial Technology at Berkeley. He is the founder of two pioneering financial technology firms and successfully managed multibillion-dollar institutional portfolios for many years. Dr. Leinweber has consulted, published, and lectured widely [...])
• Chapter 08 – Perils and Promise of Evolutionary Computation on Wall Street (Using Genetic Algorithms, Optimization Models, and Evolutionary Computation on Wall Street “Be careful what you ask for — you might get it.” My enthusiasm for machine learning, described at the end of the previous chapter, led me to kiss many artificial intelligence ( AI ) frogs. This included many flavors of inductive and explanation - based learning, [...])
• Contents of “Nerds on Wall Street” (Foreword by Ted Aronson Part 1 - Wired Markets Chapter 1: An Illustrated History of Wired Markets Chapter 2: Greatest Hits of Computation in Finance Chapter 3: Algorithm Wars Part 2 - Alpha as Life Chapter 4: Where Does Alpha Come From? Chapter 5: A Gentle Introduction to Computerized Investing Chapter 6: Stupid Data Miner Tricks Part 3 - Artificial Intelligence and Intelligence Amplification Chapter [...])
• Chapter 04 – Where Does Alpha Come From? (Where Does Stock Alpha and Alpha Return Come From? "Life Is Alpha. The Rest Is Details." — Popular T-shirt at hedge fund manager events There was a time not too long ago when, if you posed the question “Where does alpha come from?” to a roomful of academic financial economists, most of them would complain: “It’s a [...])
• Chapter 07 – A Little Artificial Intelligence Goes a Long Way on Wall Street (A Little AI Goes a Long Way on Wall Street: Artificial Intelligence and Securities Trading “If you give someone a program, you will frustrate them for a day; if you teach them how to program, you will frustrate them for a lifetime.” This is a history and technical overview of one of the earliest artificial intelligence (AI) [...])
• Nerds on Wall Street (The Impact of Technology on Wall Street and Investing Choose any link below to go to that section: Overview of "Nerds on Wall Street" Contents of "Nerds on Wall Street" Introduction to Nerds on Wall Street Praise for "Nerds On Wall Street" More Praise for "Nerds on Wall Street" Forward by Ted Aronson Part 1 - Wired Markets Chapter 01 - An Illustrated History [...])

• Alpha as Life (Passive Investing - Active Investing - Alpha Returns Index funds are passive investments; their goal is to deliver a return that matches a benchmark index. The Old Testament of indexing is Burton Malkiel’s classic A Random Walk Down Wall Street, first published in 1973 by W.W. Norton and now in its ninth edition. For typical individual [...])
• Wired Markets ( Financial Markets - Electronic Markets Not too long ago, going to a stock market meant you would meet lots of new people who were energetically shouting, running around, and making a mess with great quantities of paper. No more. Visiting a financial market now is more like visiting a telephone exchange. It can be a wild ride versus parking your cash in a few money market funds. Computers and network gear [...])
• Nerds Gone Wild – Wired Markets in Distress (Financial Nerds Gone Wild - Global Markets in Distress The original plan for this book stopped after the three parts that you’ve just read. These parts are about how markets became machines, and about using more machines to pick stocks and trade them electronically, bringing in an assortment of nifty ideas from finance and computer science [...])
• A Little Artificial Intelligence Goes a Long Way on Wall Street (A Little AI Goes a Long Way on Wall Street: Artificial Intelligence and Securities Trading “If you give someone a program, you will frustrate them for a day; if you teach them how to program, you will frustrate them for a lifetime.” This is a history and technical overview of one of the earliest artificial intelligence re (AI), and is a far cry from simple financial planning software [...])
• Collective Intelligence, Social Media, and Web Market Monitors (Web Market Monitors and the Impact of Social Media on Financial Markets "The words of the prophets are written on the subway walls." — Simon & Garfunkel, The Sound of Silence Opinions vary widely on the value of collective wisdom, with ample supporting evidence both for and against. The Internet has many positive examples: The collective ratings [...])
• Artificial Intelligence and Intelligence Amplification (Artificial Intelligence and Intelligence Amplification in Financial Markets Securities Markets are Machinery Now. This raises the question of how to best participate in the world’s new wired markets, and this is anything but simple. People who use information technology most effectively will be rewarded. Artificial intelligence (AI) as an academic discipline began at the famous 1955 Dartmouth conference organized by John McCarthy from Stanford [...])
• AI, IA, and the New Research (Hunting Investment Alpha and Trading Alpha from Online News, Social Media, and Rumors Alpha hunters are always looking for new territory. When a strategy becomes known and used by too many players, the collective market impact of getting in and getting out will squeeze out all the profit juice, and only the lowest-cost transactors (large sell-side [...])
• Stupid Data Miner Tricks (To Err Is Human. To Really Screw Up, You Need a Computer. — Popular Campus T-shirt, circa 1980 Stupid Data Miner Tricks in Quantitative Finance This chapter started out over 10 years ago as a set of joke slides showing silly, spurious correlations. Originally, my quantitative equity research group planned on deliberately abusing the genetic algorithm (see Chapter [...])
• Greatest Hits of Computation in Finance (Computational Finance, Stock Market Analysis, and Investment Trading "A computer does not substitute for judgment any more than a pencil substitutes for literacy. But writing without a pencil is no particular advantage." - Robert McNamara The Journal of Portfolio Management (JPM*) is one of the more upscale investment management and financial article publications around. For $500 a year, you get [...])
• An Illustrated History of Wired Markets (An Illustrated History of Wired Capital Markets "Progress might have been all right once, but it has gone on too long." -- Ogden Nash This chapter is based on a number of ever-evolving dinner and lunch talks I have given over many years, all called “Nerds on Wall Street" irrespective of their actual subject. Many financial conference [...])
• A Gentle Introduction to Computerized Investing (Computerized Investing, Index Funds, Quantitative Investing, and Active Management “Life would be so much easier if we only had the source code.” — Hacker proverb The beginning of index investing in the 1970s was the result of a convergence of events, one of those ripe apple moments. Institutional investors began to use firms like A.G. Becker to actually [...])
• Three Hundred Years of Stock Market Manipulations (300 Years of Stock Market Manipulations - From the Coffeehouse to the World Wide Web's Stock Manipulations In previous chapters, we saw that many of the changes in securities markets brought about by information technology in general and the Internet in particular are positive, democratizing access to markets and information. We also saw that technology is [...])