Rating: 
Summary: Long on history, but short on risk management strategy
Review: The title of my review is aimed at warning those expecting to find a risk management manual in this book that they will be disappointed. So will those who expect to find the links between the evolution modern statistics and acturial science to the rise of insurance markets and risk management instruments which have proliferated in this century. Many other books quite ably cover these interesting topics.Instead, the author provides a broad sweeping history of how modern statistics evolved and which answers some questions of why it took so long for modern risk management institutions to emerge. Ancient Greeks, among others, who appeared to be within easy reach of developing statisical theory, nonetheless relegated their fate to the whims of gods, rather than making them amenable to analysis with probabilities and actuarial tables. Tracing modern risk management from the time of Jacob Bernoulli's attempt to develop probabilities from sample data, the author also shows how a knowledge of probabilities can ultimately generate value. QUOTE Reality is a series of conneceted events, each dependent on another, radically diffeent form games of chance in which the outcome of any single throw has zero influence on the outcome of the next throw UNQUOTE The book closes with risk management innovations that followed the emergence of financial volatlity in the 1970s. Ultimately, this book may be of less interest to statisticians and investment professionals, other than those who have a curious interest in how today's highly developed set of instruments, institutions, and policies around risk came about from the foundations provided in statistical theory.
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Summary: No Risk here, The Odds areYou'll love it.
Review: i'm very much a novice in the study of risk and probabilities; however, I've been lucky enough to come across some excellent business oriented books - but in actuality and thankfully far more philosophical than financial - (Fooled by Randomness for instance) lately that have done a masterful job of presenting this seemingly dry subject in a very fascinating way. Bernstein has probably written the quintessential historical study on Risk and Probability with this volume. It is filled with interesting details of the human qualities and quirks of the mathematicians and philosophers that investigated the problems of probablity and explains the mathematics involved with lucidity and wit. The book follows a chronological approach; however, it's also thematic to show the evolution of the subject of risk management and the influence of other sciences on it - such as evolution. Those that refuse to accept the idea that markets remain unpredictable despite the development of modern risk control mechanisms like derivatives, computer modelling, and modern financial instruments will find this book frustrating. Those who want a wquick fix investment solutions guide will be even angrier and will nort find anything useful here. This book belongs in the philosophy of science and History of Ideas sections far more than the business dept. Nonetheless, the serious and thoughtful investor is advised to read this book carefully. as someone who's lost in the stock markets himself the Bernstein's book can reduce the sting of the loss and impart some well needed wisdom. I no longer invest but I loved this book all the same.
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Summary: Good outline of the history of risk
Review: "Against the Gods" is a book outlining the history of risk. The book provides an outline of all the key players and their contribution to risk theory and management. Chronologically, the book begins in ancient times and stretches all the way to the present, where Bernstein delves into the works of modern day risk luminaries. The book is well written and the style is engaging, with the author always managing to find a way to keep the reader entertained as well as informed. The book does not pretend to be a "how to" guide for risk management, nor should readers treat it as such. Although the book does discuss modern risk management tools such as derivatives, it is devoid of complex technical analysis and its treatment of such devices is limited to outlining their place in the history of risk. Those looking for technical trading analysis should seek elsewhere. One of the key questions a potential reader of this book should be asking is "Does this book have any practical applications with regards to modern day risk management?" Whilst as mentioned above the book is not a step by step guide, I firmly believe the book is useful insofar as it enables the reader to avoid the pitfalls of the past. For example, capital markets are continually surprising those who hold an unwavering belief in "regression to the mean". The books provides an explanation of what this theory states, how it has been applied and where overzealous disciples have misused this principle in the past. Overall I would recommend this book as an informative and enjoyable read.
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Summary: An outstanding book about the evolution of risk.
Review: Against the Gods is an outstanding book about the evolution of risk and man's attempt to understand it. Bernstein begins with ancient times and traces the history of numbers and probability leading eventually to today's seemingly complex financial world of portfolio theory, derivatives, and risk management techniques. Readers will learn about revolutionary thinkers including John von Neumann (inventor of game theory), Isaac Newton, Harry Markowitz (grandfather of portfolio theory), and the late Fischer Black (Black Scholes option formula) among others. Readers will also find enlightening stories about game theory, fibonacci numbers, chaos theory, the bell curve, regression to the mean, and more. Yet despite all the intelligence, computer power, and sophisticated techniques, Bernstein presents us with the growing body of evidence discovered by researchers including the late Amos Tversky and others that "reveals repeated patterns of irrationality, inconsistency, and incompetence in the ways human beings arrive at decisions and choices when faced with uncertainty." Against the Gods was chosen as one of Business Week's top 10 books of the year for 1996.
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Summary: Stocks go to extremes and this book ponders why
Review: Bernstein takes more time to get to what might be useful to the reader than he ought, but his effort culminates in quantifying how winners and losers are made in financial markets from past to present. Given the present crash in stock price there are many who could benefit from reading "Against the Gods". The book traces the beginnings of probability theory and its evolution into insurance companies and ultimately to its contribution to the use of derivatives as a means of reducing uncertainty in the outcomes of "futures" transactions. The book could have dealt more with behavioral economics, but when it does engage it delivers a message that is beneficial. All students, high school thru college, should be taught about risk measurement. Man's capacity for self deception is what generates irrational decision making. The book covers this subject in ways that will not fail to impress the rader. Far better it would be if we could learn to be less emotionally involved with our investments and more by the numbers. Professional fund manager Robert Olstein's Financial Alert Fund examplifys a by the numbers value approach along with intense scrutiny as to how companies keep their books. He buys companies with excess cash flow for half of what he thinks they're worth and sells them when they go up 30%. He follows the prescription outlined in this book and beats the S&P index yearly. His is a real life example of the value of buying and selling with no emotional attachment to the investment. This book will help you understand why this approach works. Given the collapse of the CPA-Consulting firm of Arthur Anderson and the unveiling of current corporate accounting abuses would suggest that we all could benefit from a rise in the level of our financial sophistication. This book is a good first step.
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Summary: History Buffs: Here you go!
Review: Against the Gods draws you through a vast time span. Peter Bernstein begins with the conception of the Arabic numbeting system, up through present time super speed computers. Although, the history found in this book is interesting, the title leads you to believe it is all about investment risks, however it is more of a history text book than a manual. This book is a story of theories and how they developed. You will learn quite a bit about ancient times and how things evolved into the way that they are now, but do not expect any great help or advice on how to deal with risks in the investment world. Once you get into this book, Bernstein's writing sytle draws you in. The book is interesting enough, Bernstein's knowledge of hisotry is astounding. History Buffs: here ya go!
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Summary: You'll Probably Find Parts Interesting (I'm 95% certain)
Review: Bernstein has written a thorough book that traces the linear progression of man's understanding of probability and risk. This is a journey that begins with the importatioin of the arabic numbering system to the West and ends with super-computer crunched chaos theory. In between lie the fathers (all men) of mathamatical understanding. These individuals are the story of AGAINST THE GODS. Bernstein survey's the intellectual contrubutions of each as man strives to understood basic probability, the law of large numbers, bell curves, regression analysis, uncertainty theory and everything else you dimly remember from college statistics classes. He spends the latter quarter of the book on risk and probability theory in the financial world, where theorists have developed portfolio analysis, volitility studies, hedging and sidebets and other quantatative market plays. Credit to the author for balancing his story against the very high probability that much of what these thinkers sought may be unattainable. He frequently mentions the humanity that these people try to explain with laws formulated from observations in the natural world. Although rightly impressed with his intellectual frontiersmen, Bernstein has no problem recognizing that the uncertainty that has always eluded explanation is us and that it helps make life worth living and progress possible. This book is interesting for what it is. A story of the development of theories. I would have enjoyed more of a focus on the applications of this intellectual progression that led to the development of insurance and financial markets. Though these elements are mentioned often, they provide the backdrop for Bernsteins survey of theory. I suspect another book awaits someone who will reverse the order and use theory as a backdrop for the mechanisms that have allowed the modern economy to flourish and develop. The story of insurance, speculation, the beginning of capital markets, a monied economy and the like spring from the intellectual movements so well chronicled by Bernstein. However, they are not the focus, which has the habit of making the reading dry and sometimes uninteresting to those not captivated by the actual numeric analyses and proofs which are amply offerred over the course of the book. If you like intellectual history and are looking to tie the building blocks of probability and risk analysis together over the last four centuries than this book may well captivate you. If you are seeking an understanding of how these discoveries were applied to forge the modern economy we now take for granted you will find parts interesting but may well feel that the story is incomplete.
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Summary: Neutral Recommendation - Do Not Buy - Maybe Borrow
Review: I am going to give you a short review and to the point. I read this book because it was recommended on "Money Talk" the national radio show on every weekend for 6 hours on investing - Bob Brinker hosting. He is an excellent market timer and gives solid advice. Follow his (diversified investment) advice and you will make lots of money and unlike mutual funds do better than the S&P 500 with low expense ratios. He had a recommended reading list and he named this book. The book is a disappointment. It is light weight stuff. Only part is on the markets. Frankly I cannot recommend the book. The point of the book is that the market carries risk. Most people know that and never put more than 4% in one stock. Even Bill Gates knows that and has quietly converted some of his Microsoft stock into other areas. So skip the book and just invest in government backed instruments or follow the golden rule, no more than 4% in one stock. Jack in Toronto
Rating:
Summary: Five stars
Review: Great book on risk and on the history of risk.
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Summary: Mathematics for freethinkers, for gamblers, for bankers
Review: Any reader who picks up "Against the Gods" for mathematical amusement will be surprised to find out that "the revolutionary idea that defines the boundary between modern times and the past is the mastery of risk." This claim, in the introduction, should be evidence enough that this book is no brainteaser, but rather the chronicle of a concept that has transformed how society thinks about the future. Peter Bernstein, author and consultant, begins with the ancient civilizations that came close but never actually thought specifically about risk. The reasons are many-for one, absent Arabic numerals, computational mathematics were impossible. More importantly, conceiving of risk required a profound metamorphosis of the way people thought about the future: mathematicians and philosophers could only develop risk mathematics once people were convinced that the future was unpredictable and depended on their choices more so than the whims of any particular deity. Most of the advances in the field came from the seventeenth to the nineteenth century. Often, the impetus was gambling; in fact, most of the puzzles that mathematicians tried to solve by developing probability mathematics were related to card games or craps. After that came the actuarial science, with mathematicians gripping with questions of life expectancies and illnesses. Only in the second half of the twentieth century does risk become highly mathematical, as it enters into economics and finance, where precision and quantitative data overtake rough estimations and qualitative analysis. But with the emergence of precision have also come severe criticisms-on one end from psychologists who have cast doubt on the robustness of the rational behavior hypothesis, and on the other, from chaos mathematicians who prefer non-linear and complex explanations that go against the intellectual tradition of statisticians. The history of risk, readers will find out, is more interesting than expected. It is a story of gamblers, philosophers, mathematicians, economists, psychologists and many others. Most of all, it is a chronicle of an ever ending dream: to anticipate or even predict the future. Whether people will ever be able to do that is doubtful; but there is no better account of that quest than Mr. Bernstein's "Against the Gods."
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