Scan barcode
A review by tim_ohearn
Against the Gods: The Remarkable Story of Risk by Peter L. Bernstein
5.0
Books published at the end of the 20th century have a certain purity to them. Free from the banalities of the information age yet aware of the implications of the technological revolution, the best among them are wonderfully endearing. Against the Gods is a classic, a 1996 tour de force by the late Peter Bernstein.
This book is about how our perception of risk, especially with respect to decisions with financial outcomes, advanced (rather slowly) from ancient times to the present. A generation after publication, Bernstein's charm can never be replicated, even as swaths of information are reprinted (Fortune's Formula) or selectively expanded into standalone works (Thinking, Fast and Slow).
To me, this is the original compilation--the progenitor, if you will--of the discoveries leading to our modern understanding of numbers, probability and, by extension, more concrete applications like pricing theories, risk management, and behavioral finance. The book being published in 1996 is significant because the author does adorable things like use quotes when he introduces the term "data mining" but also understands the future well enough to briefly introduce concepts such as genetic algorithms.
If this book was written five years later, there would have had to have been so much additional explanation--so many attempts to fit square pegs into round holes--that it would have taken away from the poignancy of the subject matter. Having to talk about the dot-com bubble? Eh. Having to mention that the Black-Scholes guys formed LTCM and blew up? Impossible to avoid but since this would have been my fifth time reading about it, eh. 1996 was a phenomenal stopping point and this work will endure long after my own life ends.
The implications of this book go far beyond the realm of finance. Frankly, there is very little finance (as far as dry financial topics go) until the more structured academic studies are brought in near the end. Throughout, the reader can grasp the applications of discoveries to "finance" (from personal- to high-) but, in totality, this is much more about science, discovery, history, and human nature. And for these reasons, it can be counted as among the most accessible, informative, and important books of the 20th century.
This book is about how our perception of risk, especially with respect to decisions with financial outcomes, advanced (rather slowly) from ancient times to the present. A generation after publication, Bernstein's charm can never be replicated, even as swaths of information are reprinted (Fortune's Formula) or selectively expanded into standalone works (Thinking, Fast and Slow).
To me, this is the original compilation--the progenitor, if you will--of the discoveries leading to our modern understanding of numbers, probability and, by extension, more concrete applications like pricing theories, risk management, and behavioral finance. The book being published in 1996 is significant because the author does adorable things like use quotes when he introduces the term "data mining" but also understands the future well enough to briefly introduce concepts such as genetic algorithms.
If this book was written five years later, there would have had to have been so much additional explanation--so many attempts to fit square pegs into round holes--that it would have taken away from the poignancy of the subject matter. Having to talk about the dot-com bubble? Eh. Having to mention that the Black-Scholes guys formed LTCM and blew up? Impossible to avoid but since this would have been my fifth time reading about it, eh. 1996 was a phenomenal stopping point and this work will endure long after my own life ends.
The implications of this book go far beyond the realm of finance. Frankly, there is very little finance (as far as dry financial topics go) until the more structured academic studies are brought in near the end. Throughout, the reader can grasp the applications of discoveries to "finance" (from personal- to high-) but, in totality, this is much more about science, discovery, history, and human nature. And for these reasons, it can be counted as among the most accessible, informative, and important books of the 20th century.