A Mathematician Plays the Stock Market

I am not a stock market expert nor am I into stock market that much. I have just been an outsider watching at the numbers and thinking about many people who made it big. Yes, I am a little scared about the various numbers and figures and also confused/curious about it at the same time. Mainly because I do not understand them that well.

The book  by John Allen Paulos is not the key to investment nor is it a guide to understand the stock market. The book ‘A Mathematician Plays the Stock Market’ is just the author’s attempt to explain the basics of the market and the principles in a very simplistic manner. The book is very well handled with usual examples of the authors own mistake while purchasing WCOM shares during the internet bubble bust.

John Allen Paulos is a Professor of Mathematics and a regular columnist on ABCNews.com, and a frequent commentator in national publications on the intersection of mathematics, news stories, and everyday life.

The book provides a very fundamental explanation of the basic terms with stocks eg: P/E ratio, expected value, variance, options (calls and puts) etc. The book also gives some very basic understanding of some mathematical principles like probability, compounding of interest, mean, variance, standard deviation etc. These values are explained in a detailed layman terms for general readers. The author also tackles psychological effects of various investors of the stock market and the unpredictability and randomness of the market. The book gives the user an insight into various forums, news and other discussions that can sway the behavior or the common investor.

Finally, the book does not provide any ‘mantra’ to succeed in the market but does provide a quick intro to get started.

My Rating: 8.0/10

* Image courtesy amazon.com