Biophysical Society Newsletter - January 2016

2

2016

BIOPHYSICAL SOCIETY NEWSLETTER

JANUARY

Biophysicist in Profile DAVID E. SHAW

BIOPHYSICAL SOCIETY

Officers President Edward Egelman President-Elect Suzanne Scarlata Past-President Dorothy Beckett Secretary Frances Separovic Treasurer Paul Axelsen Council Olga Boudker Ruth Heidelberger Kalina Hristova Juliette Lecomte Amy Lee Robert Nakamoto Gabriela Popescu Joseph D. Puglisi Michael Pusch Erin Sheets Antoine van Oijen Bonnie Wallace Biophysical Journal Leslie Loew Editor-in-Chief

David E. Shaw , Chief Scientist, D.E. Shaw Research, always believed that he would work as a scientific researcher; he never imagined the unexpected detour he would take into the world of finance, as a pioneer in quantita- tive trading. Shaw’s father was a theoretical plasma physicist, his mother a researcher in education, and his stepfather was an economist and professor at the University of California, Los Angeles (UCLA). “I was raised in Los Angeles, near UCLA, and my parents used to take me there so frequently that it was some time before I learned the difference between a university and a public park,” he recalls. “They looked pretty much the same to me, though the university had a wider range of interesting things going on, and was generally more entertaining.” Shaw attended the University of California, San Diego, where he double- majored in mathematics and in applied physics and information science. He then earned his PhD from Stanford University in 1980. Shaw wrote a doctoral dissertation that provided a theoretical framework for a new class of computer architectures and algorithms that could be shown to offer asymp- totically superior performance for certain mathematical operations related to artificial intelligence and database management. He joined the faculty of the Computer Science Department at Columbia University, conducting research on the design of massively parallel special- purpose supercomputers for various applications. “Although my thesis at Stanford hadn’t involved the construction of any actual hardware,” Shaw explains, “after arriving at Columbia, I received government funding to actu- ally start building one of the weird supercomputers I’d designed on paper.” The machine could not be constructed using standard components, so Shaw and his students designed their own integrated circuits, and then connected them to assemble a small-scale working prototype. They wrote code for the machine that implemented some of Shaw’s algorithms. “We were thrilled when the whole thing actually started working,” Shaw recalls. Hooked on the idea of designing and building these special-purpose super- computers, Shaw saw that building full-scale machines would require a much larger budget than government grants could likely provide. He wrote a busi- ness plan for a proposed startup venture that would manufacture massively parallel supercomputers for commercial use, and began meeting with venture capitalists. It quickly became clear to Shaw that this venture would not take off, but in the course of seeking funding, he had a chance meeting with executives from Morgan Stanley that led him on a career detour. “The executives I met with at Morgan Stanley told me that someone there had discovered a mathemati- cal technique for identifying underpriced stocks,” Shaw says. “A group of financial and technical people there had written some software that was using this technique to make investment decisions on a fully automated basis, and they were consistently earning an unusually high rate of return.” Shaw was intrigued that they were using quantitative and computational methods in the stock market, “and I couldn’t help wondering whether state of the art methods that were being explored in academia could be used to discover

Society Office Ro Kampman Executive Officer Newsletter Catie Curry Beth Staehle Ray Wolfe Production Laura Phelan Profile Ellen Weiss Public Affairs Beth Staehle Publisher's Forum

The Biophysical Society Newsletter (ISSN 0006-3495) is published twelve times per year, January- December, by the Biophysical Society, 11400 Rockville Pike, Suite 800, Rockville, Maryland 20852. Distributed to USA members and other countries at no cost. Canadian GST No. 898477062. Postmaster: Send address changes to Biophysical Society, 11400 Rockville Pike, Suite 800, Rockville, MD 20852. Copyright © 2016 by the Biophysical Society. Printed in the United States of America. All rights reserved.