Quotes from Emanuel Derman

If you decide you don't have to get A's, you can learn an enormous amount in college.

Cruelty links all three primitives [pleasure, pain, and desire]: Spinoza defines it as the desire to inflict pain on someone we love or pity. Financial speaking, cruelty is analogous to a convertible bond whose debt and equity depend on three economic underliers: the stock price, the level of interest rates, and the credit worthiness of the company's debt.

crashes are not randomly occurring lightning bolts; they are the consequence of the madness of crowds who are busy avoiding the last mania as they participate in what will turn out to be the current one.

The best quantitative finance brings real insight into the relation between value and uncertainty, and it approaches the quality of real science; the worst is a pseudoscientific hodgepodge of complex mathematics used with obscure justification.

I once heard [Gerald] Feinberg suggest that many of Manhattan's 1970s social problems could be solved by forbidding anyone who earned less than, say, $10,000 per year to live there. It had not occurred to him, apparently, that this excluded many of the people who worked at the university.

in this job you really need to know only four things: addition, subtraction, multiplication, and division—and most of the time you can get by without division!" I

In life there isn't always such an easy resolution. One has to treat people as responsible for their actions, and yet also recognize that they can't help what they do. It's always easier to regard others from the outside. But one can also try to imagine them as they experience themselves, as we all do, from the inside. Then it becomes possible to see that we all deserve mercy.

Fair value and change are therefore two sides of the same coin; the more ways in which a security can lose value from a future market move, the less it should rationally be worth today, and hence the mantra: more risk, more return. This difference between the quant's view of value as an average versus the trader's need to worry about any change makes this kind of professional cross-communication difficult. Tour

A good quant must be a mixture, too—part trader, part salesperson, part programmer, and part mathematician.

Even in the mid-1990s geeks were fair game. One afternoon a colleague and I were standing on either side of one of the narrow aisles between the banks of trading desks on the floor when one of the chief traders walked between us, his head momentarily between ours. At that instant he winced, clutched his head with both hands as though in excruciating pain, and exclaimed, "Aarrggh-hhh! The force field! It's too intense! Let me out of the way!