Currenty reading. Find it here.

The story of Lars Kroijer and his hedge fund, Holte Capital. A candid account of the difficulties he faced in raising capital when he started the fund, as well as its subsequent shutting down five years later. Kroijer was critical about how most hedge funds did not beat the market after fees (or offer uncorrelated returns). A great window into the practical considerations and the day-to-day tasks involved in running a hedge fund. Find it here.

Malcolm Gladwell argues that success follows a predictable course. It is not the brightest who succeed. Rather, success arises out of the steady accumulation of advantages – where you’re born, what your parents do for a living, and opportunity to practice. According to him, ten thousand hours (of practice) is the magic number of greatness. He also wrote about practical intelligence, an important skill which is orthogonal to general intelligence. Find it here.

A (supposedly) non-fictional account of the rise of High Frequency Trading (HFT) in the US markets. The story revolves around Brad Katsuyama, an employee of RBC who discovers how HFTs front-run orders placed by investors, and his journey in trying to make the markets less “rigged”. The book, although criticized as being closer to fiction, offered a good background on the history of dark pools, co-location, and the role of HFTs in the market. Find it here.

Adam Grant talks about the importance of being able to question your own beliefs and rethink them. He argues that changing your mind frequently is not a bad thing – rather, it shows that you’re open to learning. We should genuinely enjoy being wrong as that leads us to the right answer. Hence, we should define our identity based on our values and not opinions. That way, we can abandon some of our ideas when they are past their time. Find it here.

Talks about the two abstractions that are increasingly shaping our lives – prediction and risk – in various domains like finance, medicine, genomics, politics, warfare, and many more. Paradoxically, while prediction reduces risk (in the sense of uncertainty), improvements in prediction create new risks previously unheard of. In the extreme case, the authors believe that absolute prediction will create a deterministic world where humans will have no agency. Find it here.

A recommendation from my friend Prabhav. Some lessons on money from a soft science perspective. Financial outcomes are driven by luck to a large extent, independent of intelligence or effort. Luck and risk are siblings — find humility when things are going right and forgiveness/compassion when they aren’t. Past a certain level of income, what you need is just what sits below your ego. The highest dividend money pays is the ability to be in control of your life. Find it here.

There are two kinds of mindsets – “fixed”, and “growth”. People with the fixed mindset believe that you are born with fixed traits that cannot be changed. They prefer natural endowment over earned ability. Failure defines them and they want effortless success, which comes at the cost of learning. Those with the growth mindset, however, believe that basic qualities can be developed and you become better through failure. They achieve much greater things. Find it here.

The world has become increasingly unstable due to the complex society humans have built for themselves. In this world, there are two factions. The first faction, led by Taleb, believes that extreme events are “black swans” and cannot be predicted. The second one, led by Didier Sornette, a French mathematician, believes that these events are “dragon kings” and can be modelled and detected. Find it here.

Through his experiments, Dan Ariely describes how humans can behave irrationally in ways that are systematic. Forces like expectations, societal norms and emotions affect our decision-making skills in predictable ways. By being cognizant of these, we can make better and more rational decisions. Find it here.

An introduction to rule-based systematic trading. Challenging the platitude that you should “invest in what you know”, the author recommends diversifying across many asset categories and regions using simple rules. She introduced volatility, carry, momentum, and value trade ideas using a combination of simple historical and forward-looking indicators. Find it here.

One of my favorite reads of 2023. Although originally published in 1938, the book’s advice stands the test of time. My main takeaway, rather than “winning friends” or “influencing people”, was more about becoming an effective communicator and a pleasant person to be around. It offers great insights on interpersonal relationships. Find it here.

A dramatized narration of the events that led to the 2007 quant meltdown and the 2008 financial crisis, with the main focus on the stories of Peter Muller, Cliff Asness, and Ken Griffin. It was interesting reading about times when banks had their own hedge funds, which has not been possible since the Volcker Rule (which happened much before I was introduced to finance). Find it here.

According to the author, deep work is a state of concentration that pushes your cognitive capabilities to their limit. He argues that these efforts create new value and improve your skill. The rhythmic philosophy was my favorite – it stressed on building habits, something that I personally put a lot of effort into. Another imporant takeaway for me was to learn to give my mind enough rest after deep work. Find it here.

A light-hearted collection of interviews and articles that explore what “stupidity” is. In the author’s words, “intelligence describes people, whereas stupidity relates to specific actions”. Discusses the different types of stupidity – from behavioral biases to ignorance and a false sense of confidence, and how creativity and stupidity are two faces of the same coin of divergent thinking. Find it here.

A gift from Subroto Bagchi. The author won the Nobel Prize in literature in 2021. The book follows the story of Hassan Omar, a 15-year-old who lives in a village in East Africa. After a few chilling accounts with this abusive family, Hassan leaves his village to visit his wealthy uncle in Nairobi, and discovers the injustices and wonders the world has to offer to him. Find it here.

Taught me that personal power comes from living that is centered on principles and integrity. A central theme to the book is the P/PC ratio – where P refers to the results you want and PC is the process of improving yourself to get those results. The key to success is to have the right balance in the personal, work, physical, and mental dimensions of your life. Find it here.

My resolution for 2023 – build good habits. Some of my favorite lessons: “habits are the compound interest of self-improvement”, “your outcomes are a lagging measure of your habits”, and “you do not rise to the level of your goals, but fall to the level of your systems”. Breaks down building a habit into four phases – cue, craving, response, and reward. A great read to learn how to make good habits stick. Find it here.

Another perspective on stories of familiar names from past books — Ed Thorpe, Paul Samuelson, Long Term Capital Management, and many more — while tying it in with some history of organized crime and gambling gangsters in the US. Talks about the “Kelly criterion”, a formula used for sizing bets, and the simple intuition behind it – bet a larger proportion of your wealth the better your edge is. Find it here.

A complementary read to “Efficiently Inefficient”, in my opinion. Learnt about the history of some prominent hedge funds, starting from the first “hedged” fund A.W. Jones all the way to modern funds like Citadel. As we move the narrative from the 1980s to the 2000s, we see funds shifting from fundamental to quantitative strategies. A holistic overview to the industry’s history. Find it here.

The story of Jim Simons and Renaissance Technologies, whose famed Medallion Fund has one of the best track record in Wall Street history. The book covered its history, including its lackluster initial performance and the problems faced by Simons and his employees, as well as its turnaround. Their story illuminated how quantitative investing evolved with technological advancements. Find it here.

A comprehensive introduction to the world of hedge funds and the strategies they commonly use. Learnt about how hedge funds extract alpha from “efficiently inefficient” markets – especially in terms of liquidity, which was something I had previously not considered. A useful reading for me as I prepare for my internship at Quantedge! Find it here.

A great resource to refine your programming skills. Helped me internalize important philosophies like keeping software entropy in check, never repeating yourself in code, and decoupling different modules. Other takeaways for me – write good tests, maintain version control and keep a logbook with your daily progress. Find it here.

An autobiographical account of Edward Thorpe’s journey from his childhood interest in science experiments to ultimately running a successful hedge fund. His story on beating casinos’ “house advantage” was inspiring – it taught me the importance of trying to tackle problems that were previously thought impossible, and be able to find real world solutions. Find it here.

Taleb, who describes himself as a “skeptical empiricist”, talks about black swans – unpredictable events – and their disproportionate impact on future outcomes. Offering a mathematical take on predicting the future, and why it’s (usually) futile, this book changed my perspective, both in my personal life and as a quant. Find it here.

Almost serving as a sequel to Liar’s Poker, this book picks up the story of John Meriwether, a former bond trader at Salomon Brothers. His fund, LTCM, employed heavyweight finance academics like Merton and Scholes, and was known for their mathematical approach to trading. Their catastrophic failure is a good lesson for anyone relying solely on quantitative models for trading. Find it here.

Michael Lewis recounts his experience working as a bond salesman at Salomon Brothers in New York (and London). The book is a window into what Wall Street was like in the 1980s, and it features historically important figures in finance like Lewis Ranieri and John Gutfreund. This book was my introduction to the history of Wall Street and its important events. Find it here.

Kahneman describes the two systems our brain has: “System 1”, which is instinctive and quick, and “System 2”, which is slow and deliberate. It offers an interesting perspective on how we think and process information. Find it here.

My introduction to the world of quantitative trading. Although the code was dated, I learnt about the thought process and ideas involved in algorithmic trading, and some basic strategies. Find it here.

A gift from Naveen Jindal. Non-fiction self-help book on cutting down clutter in life and directing your focus to one central thing. Enjoyed reading it as it agreed with a lot of my own opinions on doing things efficiently. Find it here.

Reading for my internship at Ai Palette. Interesting perspective on how AI and ML can be used in conjunction with other human tools, and what it can and can’t do. Find it here.