What a wonderful book. It tells the story of our current understanding of risk and probability - as a story! A pleasure to read, it does not get bogged down in mathematical equations yet still easily manages to show how this field is used and applied throughout the ages.
The book covers math from ancient history as well as the real roots of risk starting just a few hundred years ago. If names like Bernoulli, De Moivre, Pascal, Fermat and Bayes are familiar, you’ll enjoy this book. The book discusses these people, their theories and work as well as much of the society and circumstances that drove their understanding of the field.
The author is clearly an expert in the field. He shows his rare skill in being able to condense complex mathematical theories and equations into a few sentences, easily understood as ‘this is what all those forumulae *really* mean’.
From its roots centuries ago, the book travels right up through modern portfolio and work and research that is still being done today. The author is able to make a few points that many should find startling, such as:
- The field of risk is a very new field. Only a few hundred years old really.
- Work is still ongoing. Unlike Euclidean geometry, areas that are now being taught in class are from researchers and field blazers who are still active and living today. This is not a dead math by any stretch of the imagination.
- It’s also clearly an area that is still imprecise, and depends to a large extent on human interaction and reaction. Numerous idiosyncracies from the population are shown (asking the same question in two different fashions will net you two different answers).
All in all, a delight to read. While the book is entirely non-fiction this is book to read for the pure pleasure rather than as work. If you’re at all interested in risk, portfolio management, insurance, or the mathematics behind it, this is a great book to pick up for the weekend.
Title: Against the Gods, The Remarkable Story of Risk, by Peter L. Bernstein, ISBN 0471295639
Rating: 4.5 stars out of 5. A pleasant and stimulating read.
Who should buy this book: Life insurance agents, actuaries, anyone mathematically inclined.