Customer Reviews:
Showing reviews 26-30 of 163
 Are you risk-seeker or risk-averse? July 1, 2007
Manuel F. Sescosse (Mexico, NL)
1 out of 2 found this review helpful
According to this book you are both, it only depends on the point of view that is presented. I enjoy the book from the beginning to end, especially the last three chapters. The history and analysis of rational behavior is enlightening, to anyone who has ever thought about the process of decision.
 A remarkable rational attitude against rational Gods May 16, 2007
Hooman
3 out of 7 found this review helpful
2 crucial ponits in this book:
1.Sociological: Bernstein describes how risk was first imagined as an essentially modern cultural form and significantly operationalized in early mercantile capitalist shipping, where individual losses in rapidly expanding global trade become large enough to encourage their socialization in insurance arranegemnts. This book implies some viable if crude forms measurement and scaling of risk. In his narrative, risk was there waiting to be discovered, carrying its own intrinsic meaning, which the visionaries, through their heroic powers of access to msteries of Nature, were able to reveal to men of commerce and others who could then drive the economic, cultural and technological revolution of modernity. We can note from this account of risk how an implicit normative framework`and a claim of control are advanced as defining features of this new state`of enlightenment. It is this scientific risk discourse which gives total control`of `the future at the service of the present', the implication being that risk`analysis identifies and domesticates all significant future consequences of the`relevant actions. In this way ignorance and unanticipated consequences - lack`of control - lying beyond the reach of existing scientific knowledge, thus`potentially embarrassing in future to risk assessment, are seamlessly deleted.`Risk is thus assumed to define the full sphere of conceivable meaning for considering`new technologies and their implications, and science reveals this`independent meaning. (Reference, Wynne:Reflexivity inside out?)
2. Historical: While it is apparent to historians that both Khayyam and Kharazmi were Persian thinkers, the author in keen to be selective inattentive to this fact such that he argues the system of numbers were imported from Arab world to West whereas it was firstly introduced to Arabs at the time Persia was invaded by them. Hence the author's historic mind-set starts from 12th Century while long before which is 500 B.C. risk used to be engineered among Persians. (Reference, Channel History-Engineering an Empire: Persia)
Life is a risk so the book is big May 13, 2007
andris virsnieks (Seattle, WA USA)
0 out of 2 found this review helpful
The author seems to cover every aspect of risk. The book is so broad in scope that everything in it may not be of interest to every reader, but it is hard to imagine that every reader will not finding something of interest that is applicable to their lives -- be it insurance, investment (if you don't like derivatives, Peter Bernstein indicates that index funds might be just the thing for you) or the effect of seat belts on risky behavior.
 The Evolution of Risk Management, or The Timeless Pursuit of Favorable Odds. May 6, 2007
mirasreviews (McLean, VA USA)
4 out of 4 found this review helpful
In "Against the Gods", Peter Bernstein proposes that the capacity to manage risk sets modern civilization apart from all that came before it. It allows us to take risks and make decisions crucial to any kind of progress. This book tells the story of how and why our understanding of risk came to be what it is now, from the absence of mathematical probability in the ancient world, through its emergence in the Renaissance, to the evolution of our modern theories of risk management in finance. Though he concludes that "the goal of wresting society from the mercy of the laws of chance continues to elude us", Bernstein paints an exciting picture of how the ideas behind risk management develop and become increasingly sophisticated as technologies and economics demand greater mastery of risk.
"Against the Gods" has five sections, corresponding to historical periods in the understanding of probability and risk. "To 1200: Beginnings" is the weakest section, because it attempts to explain why probability did not emerge before the Renaissance, even though many civilizations possessed the mathematical sophistication to take it on. The hypotheses just aren't convincing, and I don't think I'd call the Greeks "the most civilized of all the ancients" either. But the Arabic numeral system with its concept of "zero" was the critical development during this time, as the author points out. "1200-1700: A Thousand Outstanding Facts" covers the invention of basic probability theory, statistics, and the beginnings of business forecasting in Renaissance Europe.
Bernstein provides mini biographies of the many mathematicians, gamblers, and others who made significant contributions to our understanding of probability and risk, making this story one of human endeavor. "1700-1900: Measurement Unlimited" tells the story of risk in the Enlightenment, which introduced the concepts of utility, standard deviation, and regression to the mean as tools in measuring uncertainty. Bernstein begins using the stock market to illustrate problems of risk, a theme which will continue for much of the rest of the book. I was puzzled by the story of Francis Galton who discovered regression to the mean, much to his own chagrin, while researching eugenics. Genes don't slavishly regress to the mean. If they did, there wouldn't be over 400 breeds of dog in the world, most of which were created by 19th century selective breeding.
"1900-1960: Clouds of Vagueness and the Demand for Precision" brings us into the 20th century with the development of modern theories of risk management, the influence of game theory, and the role of diversification. One chapter is dedicated entirely to measuring risks on the stock market. The last chapter, "Degrees of Belief: Exploring Uncertainty", takes a look at new ways of viewing human behavior toward risk that gave birth to the study of "behavioral finance". While many financial risk management models were built on Efficient Market Hypothesis, which assumes human choices are independent and collectively rational, Prospect Theory has shown that "human choices are orderly, although not always rational". In other words, people are predictably irrational, opening up a whole new way of analyzing risk where human behavior is involved.
Odds Are, You'll Like It May 2, 2007
K. Johnson (US/Asia)
7 out of 7 found this review helpful
The origins, historical progression, and modern concept of risk is
presented in "Against the Gods." From the abacus to rolling dice,
annuities, insurance industry origins, explorations, gambling,
military tactics, scientific research, to investing, and more. In
most things in life big and small, there is some element of risk is
involved. This book presents Risk, and how our civilization has
utilized it - and needed it - to evolve to where it is today.
Individuals and groups don't take a risk with the expectation that it
will fail (although there's awareness that failure is a possibility).
The *expectation* is not of failure.
Peter Bernstein made this topic fun and informative for those of us
that are 'non-numerically oriented.' Actually, the concept of risk
involves a lot of non-mathematical and statistical concepts.
The writing style and chapter titles are hip: "The Winds of the
Greeks and the Roll of the Dice, The Renaissance Gambler, The Measure
of Our Ignorance, The Man Who Counted Everything Except Calories, The
Failure of Invariance," and "Awaiting the Wildness," for example.
The modern and Western concept of risk began with the Hindu-Arabic
numbering system that arrived in the West about 700 years ago. The
more in-depth examination of risk truly began during the Renaissance,
resulting in exploration an the exploitation of resources.
In Chapter 10, "Pea pods and Perils," Bernstein emphasizes the
rock-solid concept of "Regression to the Mean" (RoM). This is true
especially concerning the historical trends and patterns of the
financial markets. Yet, he notes how difficult the Predictable
Regression of the Mean is for humans to plan with RoM, and around it.
There are three reasons why humans have trouble using the RoM in
decision-making: 1) It proceeds so slow that a 'shock' will disrupt
the process, 2) When the RoM is reached, as it is periodically
people don't recognize it and hover on either side of the mean, and
3) The old mean may be unsustainable, meaning the old Mean is being
replaced by a new Mean. But....there still is....a Mean.
Bernstein states on page 173:
"If you bet that today's normality will extend indefinitely into the
future, you will get rich sooner and face a smaller risk of going
broke than if you run with the crowd."
This strategy seems oriented for the long-term growth oriented crowd.
We witnessed the sheep and lemmings in the late 1990s that
jumped onto the Tech Bubble Wagon, only to get burned badly by not
getting off in time. (Or perhaps, the sheep got out in time, but the
lemmings didn't.) Some similarities In 2007 with the Real Estate SFH
housing and condo speculation, flipping, and sub-prime mortgage and
ARM market, currently.
A certain percentage of the human population are basically, lemmings.
Bernstein spent some time on Jacob Bernoulli. Bernoulli's notion of
"satisfaction resulting from any small increase in wealth will be
inversely proportionate to the quantity of good previously
possessed." And perhaps this is why King Midus was an unhappy man.
What are the consequences of excluding, avoiding, or making risk
illegal? In modern times, when the Soviets tried to administer
uncertainty out of existence through the government fiat and
planning, they choked off social and economic progress. Communism is
contrary to human nature. But much of it was that communism took
away the concept of risk.
Risky Businesses, or business involving risk: the insurance industry
actually goes back to the Code of Hammurabi in 1800 BC. Called
"Bottomry," the owner of the ship would take out a loan to finance a
ship's voyage. No premiums were every paid but if the ship was lost,
the loan didn't have to be repaid.
The concept of life insurance basically began in Greece and Rome. In
the Middle Ages, the growth in trade spurred the insurance and
finance industries in Western Europe.
Tons of info. on common things we usually don't think of know much
about, that you can further delve into: The American game of "craps"
came to Europe via the Crusades. The mathematical invention of the
"0" and the abacus which still is in our roots. The Abacus is the
oldest counting instrument in our history. The word "Abacus" comes
from the Greek word for "sand" and "calculate" comes from the Latin
word for pebble, "calculus."
John Von Neumann invented Game Theory. Defeat is highly likely of
you play to win rather than avoid losing. True in everyday business.
There are benefits to cooperation, that produces two winners or
semi-winners rather than on loser and one winner.
A great book. If you read it, I think the odds are that that you'll
like it. :)
Showing reviews 26-30 of 163
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