The episode features Aaron Brown, a former professional gambler turned Wall Street quant trader and risk manager at AQR Capital Management. The conversation traces his fascinating journey from a 14-year-old poker player in Seattle to becoming a prominent figure in financial risk management.
Early Years:Started reading financial pages and horse racing data as a childBegan playing poker at age 14 in Seattle tavernsUsed gambling to help pay for his Harvard educationProfessional Gambling:Developed from local games to high-stakes private gamesPlayed with influential people including politicians, businessmen, and academicsEmphasized the importance of social skills in professional gamblingDiscussed the evolution of poker from underground games to mainstream entertainmentSports Betting:Explained the transformation of sports betting from mob-controlled to modern marketsDiscussed quantitative approaches to sports bettingEmphasized the importance of getting bets down early and providing valuable information to bookmakersWall Street Career:Transitioned from gambling to quantitative trading in the 1980sDetailed the evolution of mathematical approaches on Wall StreetExplained the transition from floor trading to quantitative analysisDiscussed his role in mortgage-backed securities and derivativesRisk Management Principles:Emphasized the importance of proper bet sizingDiscussed Kelly Criterion and its applicationsHighlighted common mistakes in trading and bettingStressed the importance of emotional control in decision-making
"The Poker Face of Wall Street" (2006) - https://www.amazon.com/Poker-Face-Wall-Street/dp/0470127317"Red-Blooded Risk: The Secret History of Wall Street" (2011) - https://www.amazon.com/Red-Blooded-Risk-Secret-History-Street/dp/1118043863"Financial Risk Management For Dummies" (2015) - https://www.amazon.com/Financial-Risk-Management-Dummies-Brown/dp/1119082200"A World of Chance: Betting on Religion, Games, Wall Street" (co-authored with Reuven and Gabrielle Brenner) (2008) - https://www.amazon.com/World-Chance-Betting-Religion-Street/dp/0521884667Personal Website: http://www.eraider.comFormer Chief Risk Manager at AQR Capital ManagementColumnist for Wilmott and Quantum magazinesEditorial Board member of the Global Association of Risk ProfessionalsMember of the National Book Critics CircleHarvard University (SB in Applied Mathematics)University of Chicago (MBA in Finance and Statistics)You can also find his articles and commentary on:
RealClearMarkets: https://www.realclearmarkets.com/authors/aaron_brown/Goodreads Author Page: https://www.goodreads.com/author/show/229051.Aaron_Brown