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For math, she teaches the advanced class — the top students in the school. The class had a party recently as a reward for winning a national math competition. – to stay in and play math games at the party instead of more traditionally “fun” activities, inside or out. It is a very bright group.
Math Matters. I did okay in school and was educated on many different topics, including the basic principle that math matters. Source: Federal Reserve Economic Data (FRED). Source: Calafia Beach Pundit. This notion rings especially true when it comes to finance and investing. interest rates.
And when I was studying in university economics, I did not really get the passion. The passion came when I went to invest the country’s foreign exchange reserves there and it was very much global government bond markets. My really first stroke of luck, I think, was getting that job. RITHOLTZ: Right. That makes a lot of sense.
The New Normal It is difficult for investors and individuals alike not to have been directly impacted by the rapid rise in inflation in 2021 and 2022, the succeeding interest rate hikes by global central banks and the ensuing effects these economic events have had on financialmarkets, including the mortgage market.
ANAT ADMATI, PROFESSOR OF FIANCE AND ECONOMICS, STANFORD GRADUATE SCHOOL OF BUSINESS: So, my journey starts where I took a lot of math. I was good in math and I love the math. So, I was kind of, in my romantic mind when I was in my early 20s, I was going to take but not give back to math, that kind of thing.
So as much as I’m personally still a pretty strong skeptic of active management, I mean, I understand the math, and the odds are not in your favor. I read all those academic papers, I understand where the math comes from. RITHOLTZ: And then there’s another one that does emerging markets. It’s how math works.
In doing so, I thought this conversation was really quite fascinating, and I think you will also, especially if you’re not only interested in equity, but curious as to how to combine various aspects of market functions, valuation, economic cycle, fed actions into one coherent strategy. Where are you in the economic cycle?
This math explains why we shouldn’t be surprised when the market remains “irrational” far longer than seems possible. Even worse, our economic and market models typically assume a “mild randomness” of market fluctuations. In fact, much of what happens is highly improbable. But we are.
00:03:14 [Mike Greene] So that was actually an outgrowth from my experience coming out of Wharton and you mentioned the, the, you know, the transition of people who tended to be skilled at math or physics into finance. We ended up buying, this is one of the wonderful things about financialmarkets and degrees of completeness.
I’m kind of in intrigued by the idea of philosophy and math. So I found myself getting kind of bored with my math problem sets, and then I could shift to philosophy and then go back and forth. I know you like to discuss there are different phases of the, of the, both the market and the economic cycle.
We’ll get to where you work at JP Morgan, but economics bachelor’s from Columbia MBA from Harvard. So I decided to become an economics major and a psychology minor. So the intersection of psychology and economics became really interesting. And I did a lot of options math, which I thought was interesting.
New York Times Magazine ) • Wall Street Math Wizards Are Decoding Private-Market Returns : A small band of quants is shining a light into the shadowy world of unlisted assets. Washington Post ) but see Who Is to Blame for Inflation, 1-15 : The world is complex, and it is rarely (if ever) one causal factor driving economic events.
The transcript from this week’s, MiB: Ed Hyman on Using Economic Data Opportunistically , is below. So you have all of this very pragmatic experience as opposed to getting a PhD in economics, which tends to be a little more abstract and academic. I’d been ranked i i back in the seventies, if you can do the math.
So how Barry Ritholtz : Do you go from a PhD program to financial engineering masters? Jeffrey Sherman : Well, what it was was, so I, as I said, with applications, there’s many applications of math, and the usually obvious one is physics. Barry Ritholtz : It seems that some people are math people and some people are not.
That’s because, at best , complex systems – from the weather to the markets – allow only for probabilistic forecasts with very significant margins for error and often seemingly outlandish and hugely divergent potential outcomes. Morgan Stanley’s Chief Economic Strategist blew her call , too.
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