Michael Lewis Quotes

Black-Scholes is a know-nothing system. If you know nothing about value - only price - then Black-Scholes is a pretty good guess at what a 90-day option might be worth. But the minute you get into longer periods of time, it's crazy to get into Black-Scholes. For example, at Costco we issued stock options with strike prices of $30 and $60, and Black-Scholes valued the $60 ones higher. This is insane.

The longer-term the option, the sillier the results generated by the Black-Scholes option pricing model, and the greater the opportunity for people who didn't use it.

The model used by Wall Street to price trillions of dollar's worth of derivatives thought of the financial world as an orderly, continuous process. But the world was not continuous; it changed discontinuously, and often by accident.

Black-Scholes works for short-term options, but if it's a long-term option and you think you know something [about the underlying asset], it's insane to use Black-Scholes.

It's no secret that big institutional investors have a lot of advantages on Wall Street. They get the first chance to buy hot initial public offerings. They get to meet in person with companies' managements.

Briefly speaking, our conclusion is that stochastic volatility does not make a huge difference as far as the pricing is concerned if you get the average volatility right. It makes a big difference as far as hedging is concerned.

In fact, of all hoodoos in Wall Street I think the resolve to induce the stock market to act as a fairy godmother is the busiest and most persistent.

This is Wall Street, and today is important. Because tomorrow, July 4th, I intended to make my first million dollars--an excitingday in a man's life. The enterprise was slightly illegal.

To prove that Wall Street is an early omen of movements still to come in GNP, commentators quote economic studies alleging that market downturns predicted four out of the last five recessions. That is an understatement. Wall Street indexes predicted nine out of the last five recessions! And its mistakes were beauties.

I don't think Wall Street people in general are smart. I think that's one of the biggest myths in American lore. They're tough, aggressive, greedy, quick thinking but I don't think they're particularly smart at all.

I mean, they were getting the mortgage of some guy in Omaha, you know, securitized a couple of times. I mean he had all these - they had all these types from Wall Street, you know, and they had advanced degrees, and they look very alert, and they came with these - they came with these things that said gamma and alpha and sigma and all that. And all I can say is beware of geeks, you know, bearing formulas. They've heard that in Europe.

Wall Street. - The abode of the Brokers and the Broke.

On Wall Street, there is no "Wall Street"; there are individuals.

A collapse in U.S. stock prices certainly would cause a lot of white knuckles on Wall Street. But what effect would it have on the broader U.S. economy? If Wall Street crashes, does Main Street follow? Not necessarily.

In 1929 the discovery of the wonders of the geometric series struck Wall Street with a force comparable to the invention of the wheel.

"What's the latest dope on Wall Street?" "My son!"

The CDO was, in effect, a credit laundering service for the residents of Lower Middle Class America. For Wall Street it was a machine that turned lead into gold.

The longer I operated on Wall Street the more distrustful I became of tips and inside information of every kind. Given time, I believe that inside information can break the Bank of England

I am more and more impressed with the possibilities of history's repeating itself on many different counts. You don't get very far in Wall Street with the simple, convenient conclusion that a given level of prices is not too high.

If I have noticed anything over these 60 years on Wall Street, it is that people do not succeed in forecasting what's going to happen to the stock market.

Do you have any idea how cheap stocks are? Wall Street is now being called Wall Mart Street

Wall Street is where prophets tell us what will happen and profits tell us what did happen.

I don't know if you heard the news, but Wall Street now is a farmer's market. I don't want to say things are going downhill quickly, but Obama's new campaign slogan is 'Are you better off than you were four days ago?'

Wall Street is stronger than ever.

If Wall Street crashes, does Main Street follow? Not necessarily.