on 27 March 2016
I grew up through the 1970's and my mother explained to me that some of my oldest teachers had to keep on working because inflation had wiped out their cash denominated savings that should have provided them with a comfortable old age. Indeed middle-class after middle-class from Argentina to Zimbabwe have quietly lost and started again at their beginnings, and most investment books never talk about their losses (and how to avoid them). This book defines 'shallow risk' as the normal ups and downs or 'volatility' in typical times, but 'deep risk' as the catastrophic losses that characterise 'bad times' and is the only investment book I have ever read that actually talks about the risk that you might lose ALL YOUR MONEY at some point, and suggests corresponding strategies to deal with these risks. I have sometimes felt a bit paranoid when I entertain day-dreams of deep risk, and it was nice to have these fears discussed in a rational and respectful way. Bernstein's solution for 'devastation' is property in a safe foreign city. There must be lots of Russians and Middle Eastern people reading his books, and now pushing prices up in central London.