Wall Street quant bros thought they had analytical models for prices that were based on reasonable math and science. Turns out, their models vastly under-estim

Wall Street quant bros thought they had analytical models for prices that were based on reasonable math and science. Turns out, their models vastly under-estimated the probability of a big crash. Apparently there was even a big hegdge fund based on these ideas, Long-term Capital Management, which went bust in the late 1990's, but still the "consensus" ignored it and moved on. N.N. Taleb writes about some of this in "The Black Swan", which I'm sure most readers here already know about. I would also recommend Benoit Mandelbrot's (yes, that Mandelbrot's) "The Misbehavior of Markets". https://www.goodreads.com/book/show/665134.The_Mis_Behavior_of_Markets https://www.goodreads.com/book/show/665134.The_Mis_Behavior_...