Against the Gods: The Remarkable Story of Risk
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Against the Gods: The Remarkable Story of Risk

3.93 of 5 stars 3.93  ·  rating details  ·  4,621 ratings  ·  191 reviews
With the stock market breaking records almost daily, leaving longtime market analysts shaking their heads and revising their forecasts, a study of the concept of risk seems quite timely. Peter Bernstein has written a comprehensive history of man's efforts to understand risk and probability, beginning with early gamblers in ancient Greece, continuing through the 17th-centur...more
Paperback, 383 pages
Published September 14th 1998 by John Wiley & Sons (first published 1996)
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Michael Quinn
Unfortunately, Bernstein just isn't a very strong writer. This is visible from the very beginning in his word choice and his many slips into generalization. He is very prone to hyperbole and "dressing up" relatively meaningless statements with strained poetic language. For readers, it can often be groan-inducing.

Take Bernstein's introduction, for example:

"The revolutionary idea that defines the boundary between modern times and the past is the mastery of risk: the notion that the future is more...more
Joseph Devon
Thoroughly enjoyed this. It examines the study and the notion of risk throughout...well throughout forever. A lot of the reviews make this out to be chock full of math, but speaking as a very non-math person I found it perfectly accessible.
The author has a nice way of mixing background color and the personalities of the various people he discusses in with the overall examination of risk. I enjoyed thinking along with notions like why the number zero didn't exist until society had moved forward...more
Jason ("jcreed")
A puerile abuse of mathematics, statistics, biography, and history, badly paced and full of pointless and likely apocryphal anecdotes. Religious awe for Gaussian distributions appearing in nature makes me wonder if the author has ever heard of the fucking central limit theorem. Something like a version of "how to win friends and influence people" for economists or day traders or something, except it won't even make you feel good about humanity.
Risk is inherent to any activity and uncertainty is all prevalent. Today, we have comlpex mathematical and statistical models to help us quantify and assess risk, but this was not always the case. This book tells the story of how modern Risk Management evolved with contribution from eminent scientists, statisticians, mathematicians and later, economists. What I really liked about this book is the fact that I was able to place the various names like Bernoulli, Pascal, Fermat, Fibonacci, Da Vinci,...more
Jim H.
I have heard Peter Bernstein speak and have read a lot of his articles, so I knew I might be in for a tough slog on this one, but the subtitle The Remarkable Story of Risk, got my attention.

Like Bernstein, I spent the majority of my career in financial services (that may be the only similarity between us), so I have always been fascinated with people’s attitudes about risk and money in general. I also wanted to know more about my own proclivities on those matters. Sometimes, I look back in wond...more
"A and B are playing a fair game of balla. They agree to continue until one has won six rounds. The game atually stops when A has won five and B three. How should the stakes be divided?"

Not until 1654 would an answer to the previous question finally be discovered when the French Lawyer and amateur Mathematician Pierre de Fermat joined forces with the French Mathematician Blaise Pascal. Peter Bernstein's "Against the Gods: The Remarkable Story of Risk" traces not only their relationship, but the...more
Jase Goldsmith
Mathematics and in particular financial mathematics has been an important part of evolution of the modern economic world.

Out of this, banking was created and trade evolved including the ability to evaluate risk and calculate interest risk which gave rise to modern banking, stock trading, insurance and other mathematically based industries which are the cornerstone of our modern financial structure.

It can be a little dry at times, but skipping the mathematical lessons will not detract from the st...more
Erez Davidi
In "Against the Gods" Bernstein mainly discusses the evolution and history of risk from ancient times to recent times. Bernstein explores risk through the great thinkers who contributed to the advances made mostly in the field of statistics. "Against the Gods" was rather interesting, well-written, and quite suitable for the layman. However, I felt that a broader discussion of the effects of the improved "risk understanding" had on commerce, businesses, and on society in general was missing.
Steele Dimmock
The Remarkable Story of Risk? More like the history of statistics.
I recommend you have at least univeristy level understanding of stats before you undertake this read.

Some of the book was good, like when the author briefly touched on the golden ratio, insurance through Lloyds of London and derivatives. I felt like the he could have gone deeper in to some of the sections or extrapolate more applications of the newly discovered statistical calculations - ie through analysis of the bell curve and r...more
I will readily admit that part of my dissatisfaction with this book comes from it being so different than what I thought it was going to be; that is, a story of risk management throughout history. Although, to be fair, I got that idea from the subtitle of the book, so it's not that far-fetched.

No, instead this is a book the first two-thirds of which are a history of probability and forecasting, which, though related to risk, are not the same thing as risk, as evidenced by the author awkwardly sh...more
This turned out to be a bit of a slog for me. I enjoyed the first half (which is more of a history of general probability and risk) than the second (which focuses on Wall Street financial tools). I certainly learned some things though.
Interesting so far, a little heavy going in the early chapters for those deficient in math skills but fascinating in the details. Amazed to find that Da Vinci had only 3rd grade math skills.
Welmyrat Welmyradow
Great job, but it tasted as roman or historic book. So stopped reading at the begenning
 Δx Δp ≥ ½ ħ
A page turner that you can take to the beach. Very enjoyable.
Lucid, accessible history of risk management

This work is a minor classic of financial literature. Business historian Peter L. Bernstein wrote it during the early 1990s, when faith in the power of quantitative models and financial engineering was at its apex, and he tells a heroic story. Beginning with Greek mythology, Bernstein shows how cultural ideas about risk and probability evolved through Arab mathematics, the European Enlightenment and Chicago School economics. He writes in a spare, strai...more
Donnie Edgemon
This is really more of a book about the history of probability theory than it is about the history of risk management. Of course, risk managers have to understand the probability of risk before they can hope to mitigate it. Bernstein gives a chapter by chapter account of the development of probability theory across the centuries and through the famous and not-so-famous thinkers that developed it. The history and the characters involved with it are fascinating. In the last couple of chapters, Ber...more
Omar Halabieh
As the title indicates this book narrates the history of Risk and its role in human advancement.

Peter best summarizes the content of the book in his introduction: "this book tells the story of a group of thinkers whose remarkable vision revealed ow to put the future at the service of the present. By showing the world how to understand risk, measure it, and weight its consequences, they converted risk-taking into one of the prime catalysts that drives modern Western society."

The book presents the...more
John Gonzalez
Peter Bernstein writes about math and finance with such ease that you almost forget he's covering complicated foundational concepts. Some of the material here has been covered in other historical accounts of probability but the fascinating part is the intertwined relationship among these concepts and the basic assumptions of investing, finance,and risk managing. The same salient points that the Social Sciences hammer as limitations can't be ignored when applied to finance. Measurement is often i...more
A better book than I anticipated - not only is the author an engaging writer, but he doesn't just provide a history of risk management, he actually explains the mathematical concepts behind it. Well, up until the 20th century anyway. I might have given it five stars if he'd continued.

The author spent a good amount of time on analyzing how well our history of risk management has worked, particularly with regards to investing. It was very useful to see an interpretation on just how good (or how no...more
The concept of assessing risk is something we take for granted, or it should be. Unfortunately, risk, and probability overall, are not something that is intuitive and perhaps that is why we are not very good at it as a species. Still, those that appreciate the concepts of risk, probability and how thought was pulled kicking and screaming from the ancient mindset of everything that happens is simply, the will of the gods, will surely appreciate this book. As with most transitions to modern though...more
How do you deal with uncertainty? How do others deal with uncertainty? How have people dealt with uncertainty throughout history? The last question is what this book attempts to answer, and the information is fascinating.

Unfortunately, the history of risk is a very difficult story to tell and it shows. We are given page after page of amazing anecdote and fascinating characters, but every attempt to thread them together into a cohesive narrative falls flat.

The book is divided chronologically, but...more
Wendy Yu
193: Even well into the Great Depression, the notion persisted that economic fluctuations were accidents of some kind rather than events inherent in an economic system driven by risk-taking.

206: Arrow warns, however, that a society in which no one fears the consequences of risk-taking may provide fertile ground for antisocial behavior. // When things finally went wrong, the taxpayers had to pay. Whenever insurance can be had, moral hazard will be present.

285: I believe this kind of emotional ins...more
Bernstein describes the history in a very readable manner, with stories behind the mathematicians to make them seem like real people (though I've already blurred them into one). The book starts with numbers and how they moved from roman numerals to our modern numbering system. I was amazed at the very recent transitions to using the plus and minus symbols in math. He transitions to more theory very easily with no loss of readability. He even touches on theories about why some people who were so...more
Joel Justiss
Bernstein, an economic investment consultant, discusses the various aspects of risk, beginning with the foundations of probability and proceeding through decision theory to conclude with explanations of financial investment issues such as the use and misuse of derivatives. He enlivens his historical survey with personal information and anecdotes about all the key innovators, from the Alexandrian mathematician Diophantus to Berkeley finance professor Hayne Leland.
54 The factors that contributed t...more
Just finished the book:

Liked the beginning that explained how the number zero '0' comes about and helped to fuel the advancement in mathematics.

A little boring in the middle until it reaches the end. Among the interesting points to note:

(1) Prospect Theory ( which questioned rationality and previous models built upon this assumption. E.g. Game theory is built on one. It's not the logic that is being questioned, but rather the human mind required to perform it).

For example, if we were to choose...more
One problem with the teaching of math and statistics as practiced in the U.S. is that it often seems like a series of topics that are sprung out of whole cloth with no context. Against the Gods has two parts: a history of how views of risk developed within western civilization and then a examination of the tools and (mis)use of risk managements in modern finance. In doing so it paints a picture of not only what the principles of probability and risk management are, but why they were developed an...more
It was a good book on the history of risk and how it applies to finance.
Poignant Quotes:
The capacity to manage risk, and with it the appetite to take risk and make forward-looking choices, are key elements of the energy that drives the economic system forward.

The Law of Large Numbers says in essence that the difference between the observed value of a sample and its true value will diminish as the number of observations in the sample increases.

The more uncertain the outcome, the greater may be th...more
This is a brilliant book, but marred on two key accounts. Firstly the language Bernstein uses to reference earlier cultures, their thinkers, and their ideas really rubs me the wrong way. He gives off the impression that the Wall Street of the 1990's is the be-all, end-all, greatest embodiment of risk ever conceived by mankind, and every person/theory that came before it is ultimately inferior. For me, his tone is classically Western, very antiquated, and somehow deeply unsettling. I don't like t...more
Skimmed the final 200 pages and gave up. The structure of an interesting book about the history of risk measurement is here, but the author isn't up to the task. His treatment of technical/mathematical concepts is awful. I don't know whether that is due to poor understanding or an attempt to dumb things down. Either way, it just winds up making things more confusing than they need to be. An example: after introducing the concepts of standard deviation and variance, he states that these two measu...more
A very clear and entertaining exposition on the history of risk and risk management. Combining probability, statistics, economics, and finance full of thorough historical research, Bernstein touches on so many subject and people while keeping the delicate balance between too much and too little information.

My only complaints are that he glosses over some of the details of various mathematical and economic advances, though I suppose since entire textbooks have been written on the subjects, it wo...more
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Fantastic Review of Against the Gods 1 29 Sep 22, 2011 09:57PM  
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Founder and President of Peter L. Bernstein, Inc., which he established in 1973 as economic consultants to institutional investors and corporations around the world.

In 1951, after teaching economics at Williams College and a five-year stint in commercial banking, Peter became Chief Executive of a nationally–known investment counsel firm, where he personally managed billions of dollars of individua...more
More about Peter L. Bernstein...
Capital Ideas: The Improbable Origins of Modern Wall Street The Power of Gold: The History of an Obsession Wedding of the Waters: The Erie Canal and the Making of a Great Nation Capital Ideas Evolving A Primer on Money, Banking, and Gold (Peter L. Bernstein's Finance Classics)

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“The information you have is not the information you want. The information you want is not the information you need. The information you need is not the information you can obtain. The information you can obtain costs more than you want to pay” 7 likes
“The word 'risk' derives from the early Italian risicare, which means 'to dare'. In this sense, risk is a choice rather than a fate. The actions we dare to take, which depend on how free we are to make choices, are what the story of risk is all about. And that story helps define what it means to be a human being.” 4 likes
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