Using a computer to beat Wall Street from afar is, arguably, the new American dream. While it will remain just that for most of us, an offbeat gang of academics turned financial wizards is showing it can be done. Led by acclaimed physicists Doyne Farmer and Norman Packard, the Santa Fe-based Prediction Company has proven since its 1991 founding in an adobe bungalow furnished with plastic lawn chairs and top-of-the-line Sun workstations that it is indeed possible to make millions in the world's financial markets by anticipating trends and developing software that automatically capitalizes on them. In The Predictors
, Thomas A. Bass colorfully relates their tale of fiscal triumph--and reveals in the process how even an unorthodox group of antibusiness intellectuals in far-off New Mexico can make the world's biggest institutions sit up and take notice.
Long esteemed in the scientific community, Farmer and Packard have become legendary in hacker circles since their failed attempt to beat the roulette tables in Las Vegas with toe-operated computers was chronicled in Bass's well-regarded 1985 book called The Eudaemonic Pie. This time, though, the two hit the jackpot with their cutting-edge computer programs and the company they created to trade German marks, Chicago commodities, Japanese treasury bonds, Texas oil futures, and New York securities. Bass's prose is a bit flowery at times, but his perceptive you-are-there account is nonetheless entertaining and sure to cement the pair's reputation as today's ultimate masters of "phynance," the successful, and now oft-copied, merger of physics and finance. --Howard Rothman
From Library Journal
In 1991, physicists Doyne Farmer, Norman Packard, and Jim McGill established the Prediction Company in Santa Fe, NM, intending to use their knowledge of chaos theory (the study of complex systems) to develop predictive models and automated black-box systems for beating financial markets worldwide. That they succeeded is only part of the story, the more interesting part of this tale being its human side. In Wired contributor Bass's account, we see the primary characters deal with a broad array of charlatans and geniuses, learn from their successes and failures, grow to appreciate the problems inherent in traditional economic theory, and become adept businessmen and managers. Useful as a primer in chaos theory as well as the various challenges that face start-up firms and the complexity of financial markets, this marvelous story should interest readers in both public and academic libraries.-ANorman B. Hutcherson, Kern Cty. Lib., Bakersfield, CA
Copyright 1999 Reed Business Information, Inc.