Capital Ideas: The Improbable Origins of Modern Wall Street

by Peter L. Bernstein

Book Overview

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...

• Format: Paperback
• Language: English
• ISBN: 0471731749
• ISBN13: 9780471731740
• Release Date: June 2005
• Publisher: Wiley
• Length: 368 Pages
• Weight: 1.13 lbs.
• Dimensions: 0.9" x 6.1" x 9.1"

Customer Reviews

book Capital Ideas

A very interesting book, if you like books of Richard Dawkins for sure you will love this one.

The Theory and Practice of Finance in the nutshell

This is a required book for any student of finance. It captures all the essence of finance theory in the most intuitive fashion. The very special treat of this book is the ending chapters: how people on Wall Street apply the theory to the real world--and how they make money. I would assign this book for any finance major student. If you read this book and would like to see exactly and in more technical details what Bernstein is talking in this book, try these two books: (i) The Theory of Business Finance: A Book of Readings (Hardcover) by Stephen H. Archer (Author) and (ii) Modern Developments in Investment Management: A Book of Readings (Paperback) by James H. Lorie (Compiler) They are compilations of the original papers published by those founders of modern finance. Buy these used, out of print, and old books (yet they are a pilar of what Wall Street has been built on). They are cheap in price but invaluatble in values.

Excellent Timeline

Dr. Bernstein immerses readers in lucid tales about the evolution of the capital market theories that helped shape Wall Street's mindscape. Along the way he introduces the names and faces that delivered to the investment community ideas about Brownian Motion, the Efficient Frontier, the Separation Theorem, the Capital Asset Pricing Model (CAPM), the Capital Structure Puzzle, the Black - Scholes Option Pricing Model and portfolio insurance strategies, to name a few. One of the interesting factors that emerges from this book is the powerful influence of the computer...which today we all take for granted. Quite a few of the presented ideas were indeed introduced well before the computer's general commercialization. As such, they often lay dormant, undiscovered or under-appreciated for years, even decades. It leads one to wonder about what investors are missing today that will emerge into common useage in the future. How exciting! Beginning investors will experience Capital Ideas as a useful outline of the many principal concepts they will be working with should they decide to pursue the field more seriously. Experienced investors will likely find that Capital Ideas neatly summarizes many of the academic theories they've been exposed to. A noteable gap in Dr. Berstein's exposition arises through his decision not to directly address the implications of Dr. Richard Roll's MPT critique. To say the least: It is quite important to understanding the CAPM's implications.

Classic

Anyone interested in finance, risk analysis, probability & statistics should own all of Peter Bernstein's books ! They will go down as classics of our time

Peter Bernstein is a classic storyteller.

I once sat in a meeting with a prospective client who remarked, pointedly, that their business was was in need of someone with an academic orientation to straighten them out. That might seem counter-intuitive to some. But this prospective client was in the investment advisory business. And if you read this book, you'll discover why this comment made sense and who was largely responsible for making it make sense. Peter Bernstein is a classic storyteller. He did omit some significant contributors, but most of the people who made modern Wall Street what it is, their insights, and how they developed them are presented in a heroic light