Didier Sornette - Collected Quotes

"At another level, market crashes constitute beautiful examples of events that we would all like to forecast. The arrow of time is inexorably projecting us toward the undetermined future. Predicting the future captures the imagination of all and is perhaps the greatest challenge." (Didier Sornette, "Why Stock Markets Crash: Critical Events in Complex Systems", 2003)

"Indeed, the frequency of crashes in the Monte Carlo simulations was much smaller than the frequency of crashes in the real data: if one of the most frequently used benchmarks of the industry is incapable of reproducing the observed frequency of crashes, this indeed means that there is something to explain that may require new concepts and methods." (Didier Sornette, "Why Stock Markets Crash: Critical Events in Complex Systems", 2003)

"Knowledge is encoded in models. Models are synthetic sets of rules, and pictures, and algorithms providing us with useful representations of the world of our perceptions and of their patterns." (Didier Sornette, "Why Stock Markets Crash: Critical Events in Complex Systems", 2003)

"One trader's move in the market can be interpreted by another trader as relevant additional information due to the uncertainty he faces." (Didier Sornette, "Why Stock Markets Crash: Critical Events in Complex Systems", 2003)

"Perhaps the most profound synthesis of physical sciences came from the realization that everything could be understood from 'conservation laws' and symmetry principals." (Didier Sornette, "Why Stock Markets Crash: Critical Events in Complex Systems", 2003)

"Positive feedbacks, when unchecked, can produce runaways until the deviation from equilibrium is so large that other effects can be abruptly triggered and lead to ruptures and crashes." (Didier Sornette, "Why Stock Markets Crash: Critical Events in Complex Systems", 2003) 

"The assumption of perfectly rational, maximizing behavior won out until recently in the art of modeling, not because it often reflects reality, but because it was useful." (Didier Sornette, "Why Stock Markets Crash: Critical Events in Complex Systems", 2003)

"The concept of a random walk is simple but rich for its many applications, not only in finance but also in physics and the description of natural phenomena. It is arguably one of the most founding concepts in modern physics as well as in finance, as it underlies the theories of elementary particles, which are the building blocks of our universe, as well as those describing the complex organization of matter around us." (Didier Sornette, "Why Stock Markets Crash: Critical Events in Complex Systems", 2003)

"These rumors do not circulate in all directions, but essentially from the top to the bottom of society. The rather sophisticated presentations, the apparently serious references that seem to justify their origins, and their distinguished proponents provide food for amplifications serving diverse interests and psychological biases in all layers of society." (Didier Sornette, "Why Stock Markets Crash: Critical Events in Complex Systems", 2003)