Peter Bernstein: Capital Ideas and The Power of Gold
Trader's Library #83 · Market history, crises and scandals. The history of the ideas that created modern finance, and the history of gold.
Author: Peter L. Bernstein · Original: Capital Ideas; The Power of Gold · Year: 1992 · Usefulness for traders: ★★★☆☆
What it's about
“Capital Ideas” describes how academics (Markowitz, Sharpe, Fama, Black, Scholes, Merton) created modern finance: portfolio theory, the CAPM, the efficient market hypothesis and option pricing. “The Power of Gold” is the history of humanity's obsession with gold.
What it gives a trader
The first book helps you understand where the belief that the market can't be beaten came from, and where its limits are. The second explains why gold still reacts to fear and inflation.
Lessons for traders
- the efficient market hypothesis is the benchmark for any edge
- option pricing changed the way we think about risk
- gold is more psychology than industry
What to watch out for
History books, with no trading methods.
Discussion
The discussion takes place in Hetman Capital Club (in Polish). Join the discussion in the Club →
Navigation
← #082 The 1920s and the 1929 Crash: Allen and Burns · Library index · #084 The Bear Book (John Rothchild) →
Educational content, not investment advice. The book description is my own summary and assessment, not quotations. Edition details were checked in catalogues and bookshops, and where there was doubt I said so plainly.