Against the Gods: The Remarkable Story of Risk

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Summary: Breezy, wrong on math, not what risk managers do.
Review: Remember that line in "If I were a rich man" from FIDDLER ON THE ROOF, the one that goes, "when you're rich, they think you really know!"? Well, Mr. Bernstein, a successful Wall Streeter, is certainly rich, so a former President of the Free Press decided that Bernstein really knew. As one of the guys who actually builds risk management systems, though, I didn't recognize what I do every day in his pages. Where amid the juicy historical tidbits about the origins of double entry bookkeeping or game theory is the real risk management story, that J.P. Morgan's RISKMETRICS showed definitively that market risk could be quantified? Or that there is a distinction between market risk --- the risk that the price of your bonds can change significantly overnight --- and credit risk, the risk that the bond's principal will not be repaid. Then there are the howlers: no, the central limit theorem does not state that "averages of averages miraculously reduce the dispersion about the grand average". Instead, it states conditions under which, for example, the change in the market value of a portfolio will be distributed like a "Bell Curve". (Since this fact IS one of the cornerstones of market risk management, it seems important to get it right!). Here's another: The probability that a team, having lost the first game of the World Series, will go on to win the series is NOT computed by simply enumerating the possible outcomes of the remaining six games. If the team that won the first game also wins the next three, there will be no seventh game, or, for that matter, a fifth or a sixth! I guess I gave the book an above average rating because I did like knowing about the origin of double entry bookkeeping, or the probability of living to old age in seventeenth century London. But, be warned, this is not the book to read if you really want to know about what risk managers do. For that, go to J.P. Morgan's web site ("www.morgan.com") and download the RISKMETRICS documents

Rating:
Summary: Not what I expected
Review: When I purchased this book I expected a story about the history of risk management in terms of insurance and also insight into exposures. Instead this book tells the story of mathamatics and descriptive statistics and applies those methods to investment risk. The book is enjoyable and relatively easy reading. I am glad I read it once. Would not read it agai

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Summary: A fascinating, but frustrating, history of risk theory.
Review: This book kept me up late at night finishing it. But it also left me very unsatisfied. Verbal descriptions are not an adequate substitute for equations in a quantitative field. I was not convinced that the author actually understood all the theories he discussed. I wish the book had (relatively): * less about the lives of the contributors, and more about the content of their contributions; * less about the names of things, and more about their definitions; * less about who argued with whom, and more about the arguments they used, particularly the ones that prevailed. "Against the Gods" is a memorable title, but not really very appropriate to the content of the book, which is more about investment risk than insurance risk and underwriting.

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Summary: Reading it is a NO LOSS decision, there is no risk.
Review: The book will guide you through the quest of mankind to dominate risk. The book is dynamically written and makes possible an agile and enjoyable reading experience. Peter Bernstein managed to condense a thousand years of history in a very practical book and with a lot of amusing anecdotes. In my humble opinion this book is a mus

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Summary: A History of Phillosphy of Modern Man, A Must Read!
Review: By Reading this book, we will understand that today we rely less on superstition and tradition than people did in the past, not because we are more rational, but because our understanding of risk enables us to make decisions in a rational mode. I highly recomend this book for all scholars of religious studies

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Summary: a fine historical perspective for the investor
Review: The trouble with most books of this genre, is that they all sound like "quick fixes" for average investor (as opposed to the professional). A historical perspective such as layed out in this work is, to me, invaluable, in putting all these other books in thier place. The message - understand risk, how YOU view it, and invest accordingly. Jim Kenned

Rating:
Summary: Gripping stuff, but dense
Review: This is a book well worth reading for those who want a look into the history of probabilities and forecasting (or lack thereof). For mathematicians I'm sure it's light reading, but for the layperson it's a wee bit (just a wee, though) on the technical side...moreso than I would have expected from all I've heard. Still, it's gripping, if a bit dense, stuff and will open your eyes to the risks you thought you would never -- or would always -- take. Recommended

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Summary: Example on page 134 is in error, or badly stated!
Review: The book is fascinating, but I have a problem when the examples are sloppily done. Page 134 is a mess. I'm amazed the author didn't do a better job of having someone proofread/edit his work

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Summary: A remarkable story, remarkably told!
Review: I have enjoyed "Against the Gods" like no book I've read in 10 years. Bernstein tells a remarkable story in a remarkable way. This well researched and well executed work has jolted long dormant synapses. Buy this book--I'm sending copies to several friends and family members!

Rating:
Summary: Remarkably clear with great historical vignettes
Review: We go through life, today, laying plans for the future. We consider options, weigh consequences, and make choices. The questions of what to study in school, what professional paths to follow, when to start a family, how to fund a child's education or your own retirement, are all hot topics today. But as recently as 500 years ago, these were not considered actionable choices. The future was in the hands of the fates. Peter L. Bernstein in this classic book (classic because I've read nothing like it, ever), begins by asking the profound question: What distinguishes the thousands of years of history from what we think of as modern times ? Bernstein asserts that it is the mastery of risk . What is risk ? Who are the great thinkers who have addressed this question over the last four and a half centuries ? Who showed the world how to understand risk, measure it, and weigh its consequences. ? What are the questions they have asked and how have they come to the answers that have moved civilizations from lives determined by oracles and soothsayers to lives governed by thoughtful self-determination ? How did people channel a passion for games and wagering into economics growth (new industries like stock markets and insurance, improved quality of life (demographics and medicine), and technological progress. These questions are addressed in highly readable fashion. A key element was the introduction of the Hindu-Arabic numbering to the west nearly 800 years ago. The catalyst was the Renaissance when many long held beliefs were subject to question nearly half a century later. The interplay of gambling and insurance, demographics and astronomy, mathematics and art, academics and cold hearted businessmen work together through time forming the thematic thread. In accumulating, documenting, and relating the history of complex ideas, Peter Bernstein is a master. He explains complex mathematical concepts in easy to understand terms. Bernstein does not simplify, he clarifies, and that is the strength of his writing. He uses all the wisdom from successful prior careers as an investment counselor and founding editor of a respected professional journal in the field of investment economics to take the complex, the esoteric, the arcane, and tell the story. Vignettes and rich narrative replace formal mathematical expression to make this work appeal a non-technical. There is at least one algebraic solution to a favorite epigram. Bernstein writes to reach a broad audience. As one who needs to think clearly about the future, as an educated person, a husband, a father, a business man, and as one who is deeply interested in the history and evolution of ideas that affect every aspect of modern life, I strongly recommend this book