Ed Thorpe, who recognized Madoff's ponzi in the early 90s

Discussion in 'Educational Resources' started by Pekelo, Sep 18, 2023.

  1. Pekelo

    Pekelo

    Edit: Thorp, not Thorpe

    Beside being a mathematician and HF manager, he was a good sleuth...

    old.reddit.com/r/Superstonk/comments/v5a7ty/edward_thorpe_the_former_citadel_investor_from/

     
  2. For math and history buffs the story of him realizing casino 21 could be beat is interesting.

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  3. Along the same line, the story of physicists who tried to beat roulette with shoe computers is fun too.


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  4. Pekelo

    Pekelo

    I am listening to his biography, A Man for all Markets. He also has a large part in The Quants, by Scott Patterson.

    "We meet several legends in The Quants as well including Ken Griffin, Cliff Assess and Peter Mueller. The book is best when providing a narrative history of the rise of quantatative finance and the rejection of the prevailing Efficient Markets Hypothesis which I was taught in college. It also does a nice job comparing and contrasting these Wall Street icons and their hedge funds with traditional legendary investors such as Warren Buffett, Peter Lynch and Bill Gross. Ed Thorp makes a large appearance here as well and his influence cannot be understated on the multitudes of quants that followed."
     
    Last edited: Sep 18, 2023
    Sprout, ETJ and beginner66 like this.
  5. I really enjoyed this interview with him:
     
  6. Pekelo

    Pekelo

    kalapur73 likes this.
  7. Thorp wrote an essay on Madoff being a Ponzi long, long, long before anyone heard of Markopolos.

    Another fun fact, on Black Monday during '87, Thorp had already figured out on the spot that massive standard-deviation moves were being caused by portfolio insurance.
     
  8. destriero

    destriero

    Ed was on here for a long time. Questioning the equity curve isn’t the same as being a whistleblower. You mean a portfolio 100% comprised of synthetic bull spreads did well during the internet and housing crashes?

    Anyone with access to the trading would question why you would trade the three-way over simply buying call spreads. I saw a Fairfield Greenwich prospectus in 2002-3 and knew it was impossible but never assumed it was fraud. I figured it was L/S with optionality assuming that the pitch was intentionally vague.

    Yass (POS) invested with Madoff over the same premise… that there had to be L/S alpha under the hood.