Let us now praise famous men

Tomorrow, January 22nd is Peter L. Bernstein's 90th birthday.

Peter is the doyen of writers on risk. His book ," Against the Gods" the remarkable story of risk, published in 1996 is the best on the subject. If you haven't read it yet then you should,whether or not you are in financial services. Towards the end he makes the following observation;

"Finally, the science of risk management sometimes creates new risks even as it brings the old risks under control. Our faith in risk management encourages us to take risks we would not otherwise take. On most counts that is beneficial, but we must be wary of of adding to the amount of risk in the system.... Derivative financial instruments designed as hedges have tempted investors to transform them into speculative vehicles with sleigh-rides for payoffs and involving risks that no corporate risk manager should contemplate."

Happy Birthday Peter.