Quant-Archeology

A few days ago I was visiting the StoneHedge, sorry I mean Stonehenge. I waked up very early in the morning to be there at sunrise and before it was overrun by (other) tourists.

Archaeology is the science that studies human cultures through the recovery, documentation and analysis of material remains and data.

Archeologist have done an enormous amount of important discoveries, but at the same time they have a tendency to enforce their own ideas and views “upon” the ancient without taking into account the empirical evidence or lack of empirical evidence. Instead of telling the truth: that they not have enough information yet or that they simply do not fully understand what was going on they have a tendency to come with conclusion that fit their fixed world view rather than looking closely at the data.

In finance it is typically financial economist that do Quant-Archeology. Many of them have been digging out valuable sources and information. But from what I recently have seen they are often misinterpretate serious points of what they find. If you dig into how traders operated in the ancient past it helps to see it from a traders perspective and not from a geometric Brwonian motion perspective. The world had fat-tails back then and it still has.

More on this later, possibly I will write a few papers about this or if I get time even another book. (first I have to finish up a non-financial book project)

By the way the first part of stonhenge (according to Archologist) probably dates back to around 3000 B.C (and some very early parts possibly 8000 B.C). Read a few books about the Stonhenge and you will be amazed.

Forward contracts have supposedly been found written on clay tablets from Mesopotamia dating about 1700 B.C). Derivatives are not so new either.

I am currently digging out more ancient books on option pricing...in some dusty corners of the world. There are plenty of Quant-Archeology to be done, both with repsect to new discoveries and new and better interpretation!