Monday, February 18, 2019

Emanual Derman Answers's Annual Question With: "No more time decay"

Yesterday we visited to see historian of science George Dyson in "Oligarchia: 'The digital revolution isn’t over but has turned into something else'".
Today we visit Emanual Derman whom I once described, back when he was blogging at Reuters, thusly:
Mr. Derman is a blogger based in New York City.
He also teaches at Columbia.
Before that he was head of the quantitative strategies group in the equities division, and then head of quantitative risk strategies at Goldman Sachs
And before that he was a theoretical physicist.

I hate him....
Here is his personal homepage.

...Psst...I don't really hate him.
But do visit his homepage to see why one could. 
Each year for 20 years has asked an 'Annual Question' of some 120 - 190 brainiacs. In 2009 the question was: WHAT WILL CHANGE EVERYTHING?
Among the 152 responses is:

Professor, Financial Engineering, Columbia University; Author, Models.Behaving.Badly
The biggest game-changer looming in your future, if not mine, is Life Prolongation. It works for mice and worms, and surely one of these days it'll work for the rest of us.

The current price for Life Prolongation seems to be semi-starvation; the people who try it wear loose clothes to hide their ribs and intentions. There's something desperate and shameful about starving yourself in order to live longer. But right now biologists are tinkering with reservatrol and sirtuins, trying to get you the benefit of life prolongation without cutting back on calories.

Life and love gets their edge from the possibility of their ending. What will life be like when we live forever? Nothing will be the same.

The study of financial options shows that there is no free lunch. What you lose on the swings you gain on the roundabouts. If you want optionality, you have to pay a price, and part of that price is that the value of your option erodes every day. That's time decay. If you want a world where nothing fades away with time anymore, it will be because because there's nothing to fade away....MORE
We are fans.
Previous Dermanettes:
Emanuel Derman Reviews "The Age of Cryptocurrency"
Emanuel Derman, Tyler Cowen et al On "Why is Thomas Piketty's 700-page book a bestseller?"
"Derman, Rodrik and the nature of statistical models"
Emanuel Derman: "Money Changes Everything?" or Spinoza on Pain, Pleasure and Desire
Book Review: "Models.Behaving.Badly: Why Confusing Illusion with Reality Can Lead to Disaster, on Wall Street and in Life "
"Emanuel Derman on Twitter, on volatility products"
The Financial Modelers' Manifesto