Management-accounting

The book is a reasonably interesting history of the mathematical analysis of risk. Bernstein discusses the development of probability and statistical analysis, and even some of the more modern concepts behind portfolio theory. However, I was disappointed overall. The cover and title misled me---I was hoping for a history of how the understanding of risk and the development of analytical tools led to the development of insurance markets, etc., and fundamentally changed how businesses operated in the face of uncertainty. When a shipper could insure his cargo, instead of just waiting for bad news, how did that change the world? I want to know! Instead, I got to read about who discovered the bell curve. I'm trained in a mathematical field, so I felt the discussion got a bit tedious.

I felt, overall, that the discussion was aimed more at explaining the math in layman's terms rather than exploring the impact of these developments on how people do business and make decisions.

Against the Gods draws you through a vast time span. Peter Bernstein begins with the conception of the Arabic numbeting system, up through present time super speed computers. Although, the history found in this book is interesting, the title leads you to believe it is all about investment risks, however it is more of a history text book than a manual. This book is a story of theories and how they developed. You will learn quite a bit about ancient times and how things evolved into the way that they are now, but do not expect any great help or advice on how to deal with risks in the investment world. Once you get into this book, Bernstein's writing sytle draws you in. The book is interesting enough, Bernstein's knowledge of hisotry is astounding. History Buffs: here ya go!

Bernstein takes more time to get to what might be useful to the reader than he ought, but his effort culminates in quantifying how winners and losers are made in financial markets from past to present. Given the present crash in stock price there are many who could benefit from reading "Against the Gods".

The book traces the beginnings of probability theory and its evolution into insurance companies and ultimately to its contribution to the use of derivatives as a means of reducing uncertainty in the outcomes of "futures" transactions.

The book could have dealt more with behavioral economics, but when it does engage it delivers a message that is beneficial. All students, high school thru college, should be taught about risk measurement.

Man's capacity for self deception is what generates irrational decision making. The book covers this subject in ways that will not fail to impress the rader. Far better it would be if we could learn to be less emotionally involved with our investments and more by the numbers. Professional fund manager Robert Olstein's Financial Alert Fund examplifys a by the numbers value approach along with intense scrutiny as to how companies keep their books. He buys companies with excess cash flow for half of what he thinks they're worth and sells them when they go up 30%. He follows the prescription outlined in this book and beats the S&P index yearly. His is a real life example of the value of buying and selling with no emotional attachment to the investment. This book will help you understand why this approach works.

Given the collapse of the CPA-Consulting firm of Arthur Anderson and the unveiling of current corporate accounting abuses would suggest that we all could benefit from a rise in the level of our financial sophistication. This book is a good first step.