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REVIEW: "Against the Gods", Peter L. Bernstein

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  • Rob, grandpa of Ryan, Trevor, Devon & Ha
    BKAGNGDS.RVW 20031006 Against the Gods , Peter L. Bernstein, 1996, 0-471-29563-9, U$19.95/C$30.95/UK#11.95 %A Peter L. Bernstein %C 5353 Dundas Street
    Message 1 of 1 , Nov 19, 2003
      BKAGNGDS.RVW 20031006

      "Against the Gods", Peter L. Bernstein, 1996, 0-471-29563-9,
      %A Peter L. Bernstein
      %C 5353 Dundas Street West, 4th Floor, Etobicoke, ON M9B 6H8
      %D 1996
      %G 0-471-29563-9
      %I John Wiley & Sons, Inc.
      %O U$19.95/C$30.95/UK#11.95 416-236-4433 fax: 416-236-4448
      %O http://www.amazon.com/exec/obidos/ASIN/0471295639/robsladesinterne
      %O http://www.amazon.ca/exec/obidos/ASIN/0471295639/robsladesin03-20
      %P 383 p.
      %T "Against the Gods: The Remarkable Story of Risk"

      The story of risk is, indeed, remarkable, and many times Bernstein
      skates right up to the point of saying something really profound--
      but, regrettably, never actually does so. The introduction points out
      the importance of risk analysis, especially quantitative, to the
      development of modern civilization. This explains the emphasis, in
      the early chapters, on milestones in the evolution of mathematics.
      (The latter part of the work makes it clear that the author limits
      "civilization" to the formation of the stock market.)

      The book is divided into five parts, but since the first 70% of the
      text is historical and biographical, the divisions are rather
      arbitrary. Chapter one gives us Bernstein's opinion that gambling and
      fatalism prevented Greece and Rome from developing risk analysis, the
      attempted proof being circular and uncompelling. The same amusing but
      pointless erudition is provided in chapter two, ostensibly about
      Fibonacci and arabic numerals.

      Chapter three moves more solidly into biographical territory, with
      some history of gambling and the beginning of statistics serving as an
      introduction to Cardano and Italian mathematical schools. In short
      order we then look at Pascal, Graunt, Halley, statuarial studies,
      Lloyd's of London, the first steps towards economics, a subjective
      look at the concept of utility, the law of large numbers (increased
      confidence in analysis with increased instances), Gauss (and although
      the point is obvious Gaussian distribution we never quite get there),
      and Galton and normal distribution. At this point the book almost
      abandons its previous polish and moves largely into promotional
      realms, looking at the short and long term activities of stock
      markets, a brief detour into Victorian studies of economics, more on
      statistics and reliability, a comparison of Knight and Keynes that
      isn't really clear on either, game theory as applied to chance, stock
      portfolios, psychological factors in risk choice, the irrationality of
      investors, and derivative financial instruments.

      The book provides some fascinating bedtime reading and a peek at a
      number of concepts related to statistics, but ultimately does not
      provide much in the way of an understanding of risk, risk analysis,
      risk assessment, or risk management.

      copyright Robert M. Slade, 2003 BKAGNGDS.RVW 20031006

      rslade@... slade@... rslade@...
      Computer Security Day, November 30 http://www.computersecurityday.com/
      victoria.tc.ca/techrev/mnbksc.htm sun.soci.niu.edu/~rslade/secgloss.htm
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