In my first short post about The Blank Swan , see The Market Of The Future, ... I mentioned that I find the thoughts behind this book present such a revolutionary way of treating derivatives pricing and technology that I placed it on the shelf with the books that influenced my thinking most.
In my simple world of prodgram-like thinking and reasoning it became clear quite early in the book that price dynamics is absolute and pricing technologies are for post-explanation only.
My long experience with programs gave me the insight that any system that generates something from models are easy to build, but do rarely contribute to a future view. At the other hand, recognizing models from something absolute is really challenging, and often an ill-posed problem.
Take computer graphics the technology that creates images from models (easy), but because only "photographic" snapshots represent the absolute-reality-of-scenes-at-time, systems shall recognizes features from them (difficult, unless the recognizer has structural information about the models that might have led to such an image - ironically).
Inverting is difficult but inevitable.
In quant finance you cannot recognize economic features from prices but you can calibrate and dynamically recalibrate models - and that is difficult enough. It is even hopeless to do it properly if your model solvers (the easy part) are intrinsically flawed. This is where we put all efforts on: avoid such traps.
So, for my reading the in-depth explanation on the philosophical background was not necessary, but I really enjoyed reading them. In short, I would say: nice-to-have, but not need-to-have?!
Yesterday evening, I read about the Philosopher Wilk, who claims he can transform any workplace with his Minimalist Interventions (in the UK Wired magazine). It reminds me that complex behavior often comes from little programs and Wilk's science-of-change claims that important things can often be said in one sentence. May be this is not so enjoying for readers?
