Financial Modeling Quotes

The problem with interest rates are that you are not modeling a single number, you are modeling a whole term structure, so it is a sort of different type of problem.

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.

Everyone caved, adopted loose [accounting] standards, and created exotic derivatives linked to theoretical models. As a result, all kinds of earnings, blessed by accountants, are not really being earned. When you reach for the money, it melts away. It was never there. It [accounting for derivatives] is just disgusting. It is a sewer, and if I'm right, there will be hell to pay in due course. All of you will have to prepare to deal with a blow-up of derivative books.

I founded Atari in my garage in Santa Clara while at Stanford. When I was in school, I took a lot of business classes. I was really fascinated by economics. You end up having to be a marketeer, finance maven and a little bit of a technologist in order to get a business going.

My most difficult class at Harvard Business School would have to be finance.

I'd stay away from investments in a variety of sectors that are capital intensive. Anyone who says we need $100 million before we know if what we're doing makes sense and the customers want it - that's not going to work.

I'm working with a lot of entrepreneurs and people launching new businesses. It's fun. It's what I've always liked to do and loved doing it in my years at NASCAR when we were growing NASCAR, building different lines of business and intellectual properties.

Private equity is a science project for many, many years, and when you have a science project, it leaves the human beings as a secondary fact.

If you're a teenager in Palo Alto launching an app, you know from the outset how you plan to finance your business.

Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive. Too often, though, investors forget to examine the assumptions behind the models. Beware of geeks bearing formulas.

The markets were run by mathematicians and their models but they had no business sense.

My talent is numbers.

My A-levels were physics, chemistry and maths. Science is fascinating but I wouldn't say I have used it since then. I decided to do economics.

Math people are math people. When you approach them with investments and business, they don't just ask the soft questions but eventually get to the hard questions.

I'm a very commonsense guy - I just look at the viability of the idea, if I feel the team has the ability to execute the idea. I also look at the investment syndicate, the size of the market, and then a lot of gut married on top of it.

I think one problem we've had is that people who are smart and creative and innovative as engineers went into financial engineering.

Financial analysts make a lot more than accountants.

The world of finance is a mysterious world in which, incredible as the fact may appear, evaporation precedes liquidation.

I hated being a junior investment banker. I loved the research business, the wealth management business.

I have always believed that a single talented analyst, working very hard, can cover an amazing amount of investment landscape, and this belief remains unchallenged in my mind.

The special sphere of finance within economics is the study of allocation and deployment of economic resources, both spatially and across time, in an uncertain environment. To capture the influence and interaction of time and uncertainty effectively requires sophisticated mathematical and computational tools.

Our system is dynamic, always shifting gears. What I do is I build models to beat the market.

I believe that you have to understand the economics of a business before you have a strategy, and you have to understand your strategy before you have a structure. If you get these in the wrong order, you will probably fail.

There is nothing wrong with good accounting, except that it does not necessarily lead to good science.

We don't prognosticate macroeconomic factors, we're looking at our companies from a bottom-up perspective on their long-run prospects of returning.