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on 29 April 1999
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.
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on 10 April 2010
Peter L. Bernstein does an excellent job in telling us about the people whose theories influenced portfolio management and trading. If you did economics or finance at university or any other high education course on these subjects you will have come across some if not all of the names mentioned in this book. What I like about the author's tale is that he explains the theories in such a way so that they are fairly easy to understand. I would have wished to have had a copy of this book to explain in somewhat simpler terms what I was reading/studying 25 years ago.

The concept I found rather hilarious is that of the rational investor - I have yet to meet one - and thank God not many of the people described in this book believe in its existence either. The concept of Noise I found most believable because I think that's how the business of investing is conducted virtually all the time.

If you picked up this book to learn how to improve on your stock selection then you wasted your money (and time) because it is fairly obvious that this still comes down to your own wit or analysis or reading sheep entrails or all of the aforementioned.

This book is about the history of modern finance and an excellent one at that.
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on 21 February 2010
In "Capital Ideas", Bernstein tells the story of the development of the mathematical theories underlying the parts of the financial sector concerned with portfolio management and trading. The book is well written and the language is clear. The history of the ideas is well presented as well. In this sense, the book does well what it sets out to do. However, ultimately, the subject matter is a bit too thin for an entire book, particularly as Bernstein does not particularly much consider the question of to how large a degree the theories are actually applicable to reality (this question is relevant, as the assumptions made in many of the theories are highly suspect).
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on 13 March 2014
Good for those interested in anecdotal stories of the hard time academics had in pushing their ideas. However this book seems to misunderstand the working of Wall Street, its very odd to assume that these ideas are the origins of modern Wall Street, as some authors have shown, the actual effect of papers like the Black Scholes model on the stock market is negligible which implies that investors had an intuitive understanding of how to price options way before this was formalized into a theoretical mode. This book is just about a bunch of academics going around and formalizing existing ideas, which is interesting in some respects but rather long and dull in others.

Its hard to recommend this book because those interested in Finance, will not get good descriptions of the concepts so as to solidify their grasp.
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on 27 March 2016
A complete waste of time. Its more of biography than a CAPITAL IDEAS. i would rather recommend one read "BOGLE" Common Sense On Mutual Funds. whom the author of this book mentioned BOGLE endorsed. I doubt it.!!!
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on 29 July 1999
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.
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on 24 August 1999
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
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