Quotes from Peter L. Bernstein

the more refined and intellectual our needs become, the less they are capable of satiety.

His local campaigns around Macedonia also augmented that absolutely essential economic resource: slaves-slaves to work the mines, slaves to work the fields, slaves to keep the whole economy humming.

If the satisfaction to be derived from each successive increase in wealth is smaller than the satisfaction derived from the previous increase in wealth, then the disutility caused by a loss will always exceed the positive utility provided by a gain of equal size.

If the random-walk view is correct, today's stock prices embody all relevant information. The only thing that would make them change is the availability of new information. Since we have no way of knowing what that new information might be, there is no mean for stock prices to regress to. In other words, there is no such thing as a temporary stock price-that is, a price that sits in limbo before moving to some other point. That is also why changes are unpredictable.

Why, given their advanced mathematical ideas, did the Arabs not proceed to probability theory and risk management? The answer, I believe, has to do with their view of life. Who determines our future: the fates, the gods, or ourselves? The idea of risk management emerges only when people believe that they are to some degree free agents. Like the Greeks and the early Christians, the fatalistic Muslims were not yet ready to take the leap.

Trade is also a risky business. As the growth of trade transformed the principles of gambling into the creation of wealth, the inevitable result was capitalism, the epitome of risk-taking.

God is, or he is not. Which way should we incline? Reason cannot answer.

Eight years later, Daniel Bernoulli, Jacob's nephew and an equally distinguished mathematician and scientist, first defined the systematic process by which most people make choices and reach decisions. Even more important, he propounded the idea that the satisfaction resulting from any small increase in wealth "will be inversely proportionate to the quantity of goods previously possessed." With

Writing in 1921, the University of Chicago economist Frank Knight uttered strange words for a man of his profession: "There is much question as to how far the world is intelligible at all. . . . It is only in the very special and crucial cases that anything like a mathematical study can be made.

But if men and women were not at the mercy of impersonal deities and random chance, they could no longer remain passive in the face of an unknown future. They had no choice but to begin making decisions over a far wider range of circumstances and over far longer periods of time than ever before.

but between reject and not—reject. You can decide that the probability that you are wrong is so small that you should not reject the hypothesis. You can decide that the probability that you are wrong is so large that you should reject the hypothesis. But with any probability short of zero that you are wrong—certainty rather than uncertainty—you cannot accept a hypothesis.

But in a cause-and-effect world, if we know the causes we can predict the effects. So "what is chance for the ignorant is not chance for the scientist. Chance is only the measure of our ignorance.

In 1738, the Papers of the Imperial Academy of Sciences in St. Petersburg carried an essay with this central theme: "the value of an item must not be based on its price, but rather on the utility that it yields.

Ask yourself whether the letter K appears more often as the first or as the third letter of English words. You will probably answer that it appears more often as the first letter. Actually, K appears as the third letter twice as often. Why the error? We find it easier to recall words with a certain letter at the beginning than words with that same letter somewhere else.

people who start out with money in their pockets will choose the gamble, while people who start out with empty pockets will reject the gamble.

The Reformation meant more than just a change in humanity's relationship with God. By eliminating the confessional, it warned people that henceforth they would have to walk on their own two feet and would have to take responsibility for the consequences of their own decisions.

T]he "Law Of Frequency Of Error". . . reigns with serenity and in complete self-effacement amidst the wildest confusion. The huger the mob . . . the more perfect is its sway. It is the supreme law of Unreason. Whenever a large sample of chaotic elements are taken in hand . . . an unsuspected and most beautiful form of regularity proves to have been latent all along.13

Stock prices in general follow changes in company fortunes. Investors who focus excessively on the short run are ignoring a mountain of evidence demonstrating that most surges in earnings are unsustainable. On the other hand, companies that encounter problems do not let matters slide indefinitely. Managers will set to work making the hard decisions to put their company back on track

There is a strong probability that the hot manager of today will be the cold manager of tomorrow, or at least the day after tomorrow, and vice versa. This

a Greek epigram about Diophantus states that "his boyhood lasted 1 /6th of his life; his beard grew after 1/12th more; he married after 1 /7th more, and his son was born five years later; the son lived to half his father's age, and the father died four years after his son." How old was Diophantus when he died?7

But therein lies the logician's trap: past data from real life constitute a sequence of events rather than a set of independent observations, which is what the laws of probability demand.

A man is nothing but his mind; if that be out of order, all's amiss, and if that be well, the rest is at ease.

La palabra "riesgo" procede del italiano risicare, que significa "atreverse". En este sentido, el riesgo es más bien una elección que un destino.... La idea de la gestión de riesgos solo surge cuando las personas creen que hasta cierto punto son agentes libres.

Whetstone of Witte introduced the symbol "_" because "noe 2 thynges can be more equalle than a pair of paralleles.