Product Description

Capital Ideas traces the origins of modern Wall Street, from the pioneering work of early scholars and the development of new theories in risk, valuation, and investment returns, to the actual implementation of these theories in the real world of investment management. Bernstein brings to life a variety of brilliant academics who have contributed to modern investment theory over the years: Louis Bachelier, Harry Markowitz, William Sharpe, Fischer Black, Myron Scholes, Robert Merton, Franco Modigliani, and Merton Miller. Filled with in–depth insights and timeless advice, Capital Ideas reveals how the unique contributions of these talented individuals profoundly changed the practice of investment management as we know it today.

Product Details

• Amazon Sales Rank: #887071 in Books
• Published on: 1995-12-31
• Original language: English
• Number of items: 1
• Binding: Paperback
• 352 pages

Review
Richard Brealey London Business School This is a great book...captures marvelously the excitement of the search for new ideas.

From the Back Cover
CAPITAL IDEAS

Capital Ideas traces the origins of modern Wall Street, from the pioneering work of early scholars and the development of new theories in risk, valuation, and investment returns, to the actual implementation of these theories in the real world of investment management. Starting with the French mathema–tician Louis Bachelier—who wrote about the unpredictability of stock prices in the early 1900s—Bernstein brings to life a variety of brilliant academics who have contributed to modern investment theory over the years:

• Harry Markowitz, who wrote about optimizing the tradeoff between risk and reward
• William Sharpe, who shook the pillars of the investment establishment by asserting that the market cannot be beaten
• Fischer Black, Myron Scholes, and Robert Merton, who paved the way for the creation of financial derivatives and new ways of controlling risk
• Franco Modigliani and Merton Miller, who extolled the central role of arbitrage in determining the value of securities

Filled with in–depth insights and timeless advice, Capital Ideas reveals how the unique contributions of these talented individuals profoundly changed the practice of investment management as we know it today.

About the Author
Peter L. Bernstein, one of the foremost financial writers of his generation, is the author of the bestselling, Against the Gods: The Remarkable Story of Risk and The Power of Gold: The History of an Obsession, both from Wiley, as well as five other books. He is President of Peter L. Bernstein, Inc., an investment consulting firm he founded in 1973 after many years of managing billions of dollars in individual and institutional portfolios. He is the founding Editor of the Journal of Investment Management. He has lectured widely throughout the United States and abroad, and has received the highest honors from his peers in the investment profession.

Customer Reviews

Brilliantly writen, it puts the human face on modern finance
Modern financial theory has revolutionised the twentieth century, but who are the actors on this modern stage? Peter Bernstein has personally interviewed all the great theorists of modern finance and placed them not just in historical sequence but also links the theory together so that out of the many jigsaw pieces, the intellectually elegant portrait of risk and return emerges as the great American contribution to the development of modern society.

This book is stimulating for students and wonderfully entertaining for any one else who wonders what happens on Wall Street and the City of London.

Good introduction to difficult topic
Capital Ideas can be a nice introduction to a difficult topic and one should read it before starting to get involved in the more profound literature of financing scholar books.

The only two blames I have to make is 1. that the personal side of the stories is expanded too far - it would be enough to state that some teacher is considered a workaholic, the description of his calling at sunday night gets you out of the more important context of what he rally prooved and claimed for the new theory of fi- nancing. and 2. that the differences in the beta and CAPM theories is not so clearly described - although it is a major topic in the book - that the book alone leaves you with a precise idea of the differences. So this must be left for other books.

The book is nonetheless highly recommendable, since it has the advantage that sine ira et studio all theories find their way into the book, so you will not run into the danger that you loose one financial problem just

because the scholarly author of a financing manual forgets to tellabout it, which is often the case.

So get this book soon, it is easy to read, and a friend of mine - a Dr of Medicine who would for the first time read about this topic - was much impressed by it and liked it immediately; and I can add, he even understood it.

Dr. Rudolf C. King CEO, princeandprince.com

Mildly interesting theory, useless practice
I was hoping to get a better understanding of theories that have driven historical stock market performance. Unfortunately, I felt this book fell short. He explains several academic theories for portfolio selection, which was theoretically interesting. Most of them were pretty useless to me to help with stock selection. One academic said the longrun return you can expect in the stock market is 0%; get real. Actually using these theories is basically impossible. For a better academic understanding of the market, I'd highly recommend A Random Walk Down Wall Street. I started buying Vanguard 500 after reading that one.