About the Book
The fascinating story behind the machines that trade trillions of dollars every day “A Bildungsroman, one jacket blurb calls this book—and sure, it’s a traditional coming-of-age tale. But the story itself is anything but conventional. The pleasures of the book lie in the story of their bumpy path to success.” Canadian Business
In 1968, Michael Goodkin is about to graduate from Columbia University. While his classmates interview for jobs, he daydreams of seeing the world as a man of independent means. Noticing that there are no computers on Wall Street and drawing on his experiences as a failed teenage investor and successful gambler, he has an epiphany: since no one knows the right price for anything, the only way to beat the market is to make a computer that comes up with the wrong answer faster than the professionals.
And thus begins a journey that takes this provincial Midwesterner from nearly broke to opulent Park Avenue. The Wrong Answer Faster is the story of unintended consequences: how a technique originally created to minimize market risk spiraled into a multi-trillion dollar game with unparalleled risks.
Having founded and sold a firm that changed the world, Goodkin left New York to travel and play backgammon—only to return to found another groundbreaking firm, Numerix, a software company that substituted computational physics for econometrics to better manage derivative risk.
The story of the computerization of Wall Street by the man at the helm
Packed with keen insights, based almost entirely on poker, backgammon and game theory
Goodkin's unique insight to the markets is that everyone has the wrong answers
The solution is not to try to beat the market but to come up with the wrong answers faster
The epic tale of the untold story how one man with a great idea decided not to play the market but to revolutionize the financial world for generations to come by creating the most ground breaking tool for market players since the ticker tape.
Table of Contents:
Prologue 1 Chapter 1 High School Hustler 9
Older Doesn’t Mean Smarter, and Bigger Doesn’t Mean Better 10
My First Bank Account 15
Working in the Off-Season 16
The Bill Collector 20
Sundays on Maxwell Street 24
Birth of a Banker 26
Graduation Day 31
Chapter 2 The Late Bloomer 35
Harvard on the Rocks 39
Home for the Holidays 41
The Rat Practical 43
Developing a New Perspective 45
Politics Is Politics 50
Moving to the Downstate Campus 54
Leaving on a Jet Plane 58
Chapter 3 Leading a Double Life 75
In the Mayor’s Office 79
The Best of the Worst 82
Preparing for the Worst 86
Becoming a New Yorker 89
Chapter 4 A Big Idea 91
Still Daydreaming after All These Years 95
The Wrong Answer Faster 97
Mispriced Merchandise 100
Chapter 5 Chasing Venture Capital 109
Shelly Likes the Horse 112
The Problem Is with the Jockey 120
Shelly Takes a Flyer 121
The Guy without the Money 123
Negotiating My Terms 125
Chapter 6 Banking the Venture Capital 127
A Phone with a View 128
Recruiting Shelton 132
Meeting an Investor 141
Quitting Time 143
Hiring Lawyers and Accountants 145
Money by a Nose 147
Miles to Go 153
Chapter 7 Stepping Out in the World 157
Recruiting the Brain Trust 163
I Can’t Even Give It Away 172
Worth More Dead than Alive 174
Chapter 8 Making the Impossible 177
One Door Closes and Another Door Opens 178
Turning Luck into a Craft 182
Changing Jockeys in Midstream 185
Conducting a Symphony Orchestra 186
Person-to-Person Call for Dr. Shelton 187
Turning on the Lights 189
Targeting the Wrong Market 191
Chapter 9 If I Were a Rich Man 195
Rich People Play Backgammon 201
Entering a Parallel Universe 203
The New York Circuit 204
Stretching Rubber Bands 206
The King and I 208
Looking in All the Wrong Places 211
Fishing in Seattle 217
The Best Execution in the Business 220
Chapter 10 Too Good to Be True 223
Snagging an Invitation to London 225
An American Capitalist in Sir Sigmund’s Court 229
The Swiss Connection 233
Closing the Deal 237
Creating a Competitive Bid 244
Graduation Ceremony 248
The Year of Transition 249
Chapter 11 Breaking Away 251
Backgammon and Business 253
Not the Man I Used to Be 259
Chapter 12 Does God Play with Loaded Dice? 269
Back to the Futures 271
Accessing the World of Master Physicists 272
Examining the Dice 277
Chapter 13 Making Physics into a Business 283
Home Alone 289
Seed Money 292
The Russians Are Coming, the Russians Are Coming 296
A Made Man 300
If You Build It They Will Come 301
Running on Empty 306
Entering the Big Leagues 311
Everything Is Connected 312
Time to Get Out of the Way 315
Epilogue 317
Acknowledgments 319
Index 321
About the Author :
Michael Goodkin, a successful gambler, failed investor, and mediocre student, was advised by his high school guidance counselor to become a plumber. Eight years later, in 1968 he combined his knack for gambling and lessons learned as a failed investor with the expertise of future Nobel laureate economists to found the company that introduced computerized trading to Wall Street. After seeing the world as a professional backgammon player, in 1996 he founded the software company that pioneered the application of computational physics to financial derivatives. A lecturer at forums including the University of Chicago and the Office of the Comptroller of the Currency, Goodkin holds a JD from Northwestern University and an MBA from Columbia University. The author of Paper Gold, a bestselling novel of financial intrigue, he lives in Chicago.
Michael Goodkin, a successful gambler, failed investor, and mediocre student, was advised by his high school guidance counselor to become a plumber. Eight years later, in 1968 he combined his knack for gambling and lessons learned as a failed investor with the expertise of future Nobel laureate economists to found the company that introduced computerized trading to Wall Street. After seeing the world as a professional backgammon player, in 1996 he founded the software company that pioneered the application of computational physics to financial derivatives. A lecturer at forums including the University of Chicago and the Office of the Comptroller of the Currency, Goodkin holds a JD from Northwestern University and an MBA from Columbia University. The author of Paper Gold, a bestselling novel of financial intrigue, he lives in Chicago.
Review :
"A fascinating book that chronicles the life of this man who had the foresight to understand the potential of harnessing the power of the computer and who has thereby revolutionised the trading basis of the financial markets in his lifetime."—FT Advisor, 28th June 2012
“Even after the 2008 crisis proved that many of the banks’ computer-based models were flawed, computers and “rocket scientists” still play a major role on Wall Street. They have pioneers like 70-year-old Michael Goodkin to thank. On paper, Goodkin was an unlikely revolutionary. . . he was one of the first to spot that computers could be used to automate trading. Goodwin made millions, but he received little public credit. . There are no trading tips or secret formulae in the book. Instead, it’s what Jordan Simm in Canadian Business calls a `traditional coming-of-age tale’. But, as Simm points out, `the story is anything but conventional’, providing a window into a time when Wall Street was a very different place. Goodkin’s blunt style makes him an engaging writer, while few others have gone from street hustler to high finance via such an interesting path.”—MoneyWeek
“A Bildungsroman, one jacket blurb calls this book—and sure, it’s a traditional coming-of-age tale. But the story itself is anything but conventional. The pleasures of the book lie in the story of their bumpy path to success.”—Canadian Business
"Michael Goodkin brought the first computer to Wall Street sparking a financial revolution - proving it isn't what you know, but how fast you know it. Here's how his story began..."—Hedge Magazine
“In this rags-to-riches tale, Goodkin recounts the story of how he created a computerised trading system that revolutionised Wall Street in the late 1960s. It is an inspiring story of how a young man with no money or career assembles a group of smart economists and investors and creates a new business that transforms a whole industry. Here, bold ambition triumphs over mediocrity…” —The Irish Times
"A fascinating book that chronicles the life of this man who had the foresight to understand the potential of harnessing the power of the computer and who has thereby revolutionised the trading basis of the financial markets in his lifetime."—FT Advisor, 28th June 2012
“Even after the 2008 crisis proved that many of the banks’ computer-based models were flawed, computers and “rocket scientists” still play a major role on Wall Street. They have pioneers like 70-year-old Michael Goodkin to thank. On paper, Goodkin was an unlikely revolutionary. . . he was one of the first to spot that computers could be used to automate trading. Goodwin made millions, but he received little public credit. . There are no trading tips or secret formulae in the book. Instead, it’s what Jordan Simm in Canadian Business calls a `traditional coming-of-age tale’. But, as Simm points out, `the story is anything but conventional’, providing a window into a time when Wall Street was a very different place. Goodkin’s blunt style makes him an engaging writer, while few others have gone from street hustler to high finance via such an interesting path.”—MoneyWeek
“A Bildungsroman, one jacket blurb calls this book—and sure, it’s a traditional coming-of-age tale. But the story itself is anything but conventional. The pleasures of the book lie in the story of their bumpy path to success.”—Canadian Business
"Michael Goodkin brought the first computer to Wall Street sparking a financial revolution - proving it isn't what you know, but how fast you know it. Here's how his story began..."—Hedge Magazine
“In this rags-to-riches tale, Goodkin recounts the story of how he created a computerised trading system that revolutionised Wall Street in the late 1960s. It is an inspiring story of how a young man with no money or career assembles a group of smart economists and investors and creates a new business that transforms a whole industry. Here, bold ambition triumphs over mediocrity…” —The Irish Times
"A fascinating book that chronicles the life of this man who had the foresight to understand the potential of harnessing the power of the computer and who has thereby revolutionised the trading basis of the financial markets in his lifetime."—FT Advisor, 28th June 2012
“Even after the 2008 crisis proved that many of the banks’ computer-based models were flawed, computers and “rocket scientists” still play a major role on Wall Street. They have pioneers like 70-year-old Michael Goodkin to thank. On paper, Goodkin was an unlikely revolutionary. . . he was one of the first to spot that computers could be used to automate trading. Goodwin made millions, but he received little public credit. . There are no trading tips or secret formulae in the book. Instead, it’s what Jordan Simm in Canadian Business calls a `traditional coming-of-age tale’. But, as Simm points out, `the story is anything but conventional’, providing a window into a time when Wall Street was a very different place. Goodkin’s blunt style makes him an engaging writer, while few others have gone from street hustler to high finance via such an interesting path.”—MoneyWeek
“A Bildungsroman, one jacket blurb calls this book—and sure, it’s a traditional coming-of-age tale. But the story itself is anything but conventional. The pleasures of the book lie in the story of their bumpy path to success.”—Canadian Business
"Michael Goodkin brought the first computer to Wall Street sparking a financial revolution - proving it isn't what you know, but how fast you know it. Here's how his story began..."—Hedge Magazine
“In this rags-to-riches tale, Goodkin recounts the story of how he created a computerised trading system that revolutionised Wall Street in the late 1960s. It is an inspiring story of how a young man with no money or career assembles a group of smart economists and investors and creates a new business that transforms a whole industry. Here, bold ambition triumphs over mediocrity…” —The Irish Times
"A fascinating book that chronicles the life of this man who had the foresight to understand the potential of harnessing the power of the computer and who has thereby revolutionised the trading basis of the financial markets in his lifetime."—FT Advisor, 28th June 2012
“Even after the 2008 crisis proved that many of the banks’ computer-based models were flawed, computers and “rocket scientists” still play a major role on Wall Street. They have pioneers like 70-year-old Michael Goodkin to thank. On paper, Goodkin was an unlikely revolutionary. . . he was one of the first to spot that computers could be used to automate trading. Goodwin made millions, but he received little public credit. . There are no trading tips or secret formulae in the book. Instead, it’s what Jordan Simm in Canadian Business calls a `traditional coming-of-age tale’. But, as Simm points out, `the story is anything but conventional’, providing a window into a time when Wall Street was a very different place. Goodkin’s blunt style makes him an engaging writer, while few others have gone from street hustler to high finance via such an interesting path.”—MoneyWeek
“A Bildungsroman, one jacket blurb calls this book—and sure, it’s a traditional coming-of-age tale. But the story itself is anything but conventional. The pleasures of the book lie in the story of their bumpy path to success.”—Canadian Business
"Michael Goodkin brought the first computer to Wall Street sparking a financial revolution - proving it isn't what you know, but how fast you know it. Here's how his story began..."—Hedge Magazine
“In this rags-to-riches tale, Goodkin recounts the story of how he created a computerised trading system that revolutionised Wall Street in the late 1960s. It is an inspiring story of how a young man with no money or career assembles a group of smart economists and investors and creates a new business that transforms a whole industry. Here, bold ambition triumphs over mediocrity…” —The Irish Times
