Covers Mainly Actuarial Work, 06 Feb 2003
An average book which covers most of the topics required in Actuarial Science for example annuities, discounting and life insurance.

Sadly, this book does not cover the other important section of mathematical finance required in my university for example the pricing of securities, derivatives, arbitrage and martingales.

This is the book which provides examples about long term investments, time value of money, and pensions, but not the commonly sought after "Black-Scholes" book.

Covers Mainly Actuarial Work, 06 Feb 2003
An average book which covers most of the topics required in Actuarial Science for example annuities, discounting and life insurance.

Sadly, this book does not cover the other important section of mathematical finance required in my university for example the pricing of securities, derivatives, arbitrage and martingales.

This is the book which provides examples about long term investments, time value of money, and pensions, but not the commonly sought after "Black-Scholes" book.

Does anyone think financial markets are fine as they are? I doubt it., 12 Jan 2007
The wheel's invention first took place a few thousands years ago in the the Fertile Crescent region, now occupied by Iran and Iraq. As with any now seemingly obvious invention, it's probable that the development would have encountered resistance, bemusement and mockery from stakeholders. Perhaps, for example, communities of farmhands might have tried to outlaw the wheel because one of its potential utilisations in harvesting may reduce the manual workload. Others may have ridiculed it as unnatural or thought the wheel pointless because of the lack of what we would now call 'roads.'

It is easy to forget that many of our modern goods and services were once abstract ideas requiring invention, innovation, sacrifice, and struggle prior to their acceptance. The realm of risk and finance is no exception, baring in mind that there were no stock markets, futures exchanges or welfare programmes in the Garden of Eden - between then and now human vision and persistence has made them possible.

The author invites us to become economic visionaries ourselves, contemplating where modern facilitative technologies may take risk management in the 21st century. His own conceptualisations feature inequality insurance; house-value insurance; income-linked loans and other notions that may seem illogical at first, but make perfect sense to those with modest understandings of the ebb and flow of economic history.

Each of his concepts are accompanied by practical and theoretical input relating to their enactment. Emphasis is placed on mechanisms developed in the fields of cognitive and social psychology in order to outline means to encourage social acceptance of risk devices. Lessons are also derived from past financial innovations including social security, pension rights and life insurance, which serve as practical guides as well as interesting historical lessons.

The New Financial Order is economics at its best, combining theory, philosophy and history to propose solutions rather than merely identify problems. It takes a lot of courage to play the role of 'financial futurist' and Shiller's effort should certainly be commended!'

A Must-Read!, 29 Apr 2003
Economist Robert Shiller became a household name when he published his previous bestseller Irrational Exuberance just as the dot.com boom was peaking. In The New Financial Order, he capitalizes on his celebrity to put forward a thoughtful, detailed proposal for managing economic risks. This highly readable book portrays a future in which many serious individual financial risks are dispersed to savvy global investors, thanks to technology. Imagine violinists being able to insure their careers in addition to their Stradivarius instruments, developing countries securing generous loans from the first world by tying the repayment schedules to their future GDPs and a revamped tax system preventing the gap between rich and poor from widening. We ....suggest this book to risk-management professionals who want to step back and look at the big picture, as well as to anyone who has a stake in creating new financial products to meet twenty-first century needs.

Covers Mainly Actuarial Work, 06 Feb 2003
An average book which covers most of the topics required in Actuarial Science for example annuities, discounting and life insurance.

Sadly, this book does not cover the other important section of mathematical finance required in my university for example the pricing of securities, derivatives, arbitrage and martingales.

This is the book which provides examples about long term investments, time value of money, and pensions, but not the commonly sought after "Black-Scholes" book.

Does anyone think financial markets are fine as they are? I doubt it., 12 Jan 2007
The wheel's invention first took place a few thousands years ago in the the Fertile Crescent region, now occupied by Iran and Iraq. As with any now seemingly obvious invention, it's probable that the development would have encountered resistance, bemusement and mockery from stakeholders. Perhaps, for example, communities of farmhands might have tried to outlaw the wheel because one of its potential utilisations in harvesting may reduce the manual workload. Others may have ridiculed it as unnatural or thought the wheel pointless because of the lack of what we would now call 'roads.'

It is easy to forget that many of our modern goods and services were once abstract ideas requiring invention, innovation, sacrifice, and struggle prior to their acceptance. The realm of risk and finance is no exception, baring in mind that there were no stock markets, futures exchanges or welfare programmes in the Garden of Eden - between then and now human vision and persistence has made them possible.

The author invites us to become economic visionaries ourselves, contemplating where modern facilitative technologies may take risk management in the 21st century. His own conceptualisations feature inequality insurance; house-value insurance; income-linked loans and other notions that may seem illogical at first, but make perfect sense to those with modest understandings of the ebb and flow of economic history.

Each of his concepts are accompanied by practical and theoretical input relating to their enactment. Emphasis is placed on mechanisms developed in the fields of cognitive and social psychology in order to outline means to encourage social acceptance of risk devices. Lessons are also derived from past financial innovations including social security, pension rights and life insurance, which serve as practical guides as well as interesting historical lessons.

The New Financial Order is economics at its best, combining theory, philosophy and history to propose solutions rather than merely identify problems. It takes a lot of courage to play the role of 'financial futurist' and Shiller's effort should certainly be commended!'

A Must-Read!, 29 Apr 2003
Economist Robert Shiller became a household name when he published his previous bestseller Irrational Exuberance just as the dot.com boom was peaking. In The New Financial Order, he capitalizes on his celebrity to put forward a thoughtful, detailed proposal for managing economic risks. This highly readable book portrays a future in which many serious individual financial risks are dispersed to savvy global investors, thanks to technology. Imagine violinists being able to insure their careers in addition to their Stradivarius instruments, developing countries securing generous loans from the first world by tying the repayment schedules to their future GDPs and a revamped tax system preventing the gap between rich and poor from widening. We ....suggest this book to risk-management professionals who want to step back and look at the big picture, as well as to anyone who has a stake in creating new financial products to meet twenty-first century needs.

The argument for rational fatalism, 16 May 2007
I've just finished reading "Risk" by John Adams and "Fooled by Randomness" by Nicholas Taleb. They make good companions. Both are illuminating and refreshingly entertaining. And both have the same main target: proponents of the view that risk is an objective phenomenon that can be measured and managed.

"Risk" Adams contends is a word that refers to a future that exists only in the imagination. It is inescapably subjective. Taleb, who is a New York trader, is especially [...] those who are fooled by randomness - deluded souls who believe that luck can be managed, that future prices can be divined by a study of past prices - and that such divinations will make them rich. The iconic case, with which Taleb has great sport, is the collapse of Long Term Capital Management. Two directors of LTCM, Merton and Scholes, received Nobel prizes for their development of the luck management methods that produced the collapse.

Adams, writing before the fall of LTCM, puts his finger on its cause. Merton and Scholes were not detached scientists observing something that could be objectively measured, they were players in the game, influencing, and being influenced by, all the other players.

Adams' most interesting, and sadly neglected, case study of the interactive nature of risk management is his demolition of the myth of the efficacy of seat belt legislation. Nowhere in the world, he shows, have seat belt laws saved lives. Everywhere they have resulted in a transfer of the burden of risk from those best-protected in cars to the most vulnerable outside cars, pedestrians and cyclists.

Five stars to both Adams and Taleb!

PS Your previous reviewer, Leitch, is wrong on his two "fundamental" points.
1. His belief that the risk associated with the rise and fall of shares is predictable. If he is not persuaded by Adams and Taleb, he might try When Genius Failed: The Rise and Fall of Long-Term Capital Management by Lowenstein, or Googling "Brian Hunter Amaranth" for examples of the disasters experienced by those who shared his belief in the predictability of share prices and natural gas prices.
2. His conclusion that Adams argues that motorists have a fixed "favourite level of risk". One of Adams' most useful insights is that propensity to take risk varies with the perceived rewards of risk taking.

Simply wrong on two fundamental points, 22 Apr 2007
I read "Risk" a couple of weeks ago and quickly realised that it had a lot to say about the author's personal battles down the decades with people who disagreed with him. The endless point scoring and flowery language irritated me.

Having said that, he has two interesting points to make that everyone should know about. One is that people respond to perceived risk changes by becoming more or less careful in response. The other is that this can lead to risk compensation, where a reduction in risk leads to more risky behaviour.

Where I think he has gone fundamentally wrong is on two points.

The first is his insistence that risk cannot be measured. Certainly, behaviour changes in response to perceived risk do make measurement in some situations impossible. However, in other situations, such as the behaviour of a roulette wheel, an inanimate object that does not perceive risk, risk can be measured. Adams infers from the practical impossibility of risk measurement in some important situations that all risk measurement is impossible, which is an over-generalisation. (Perhaps he was thinking of attempts to make the public safer, where his general point would be a reasonable one.) It would have been helpful if he outlined where risk measurement was futile and where helpful measurement was possible rather than just writing off much of the risk management activity going on in the world. Better still, how about suggesting a way to measure whatever it is that people respond to?

The second mistake is to conclude from the risk compensation phenomenon that people have a risk thermostat and seek their favourite level of risk. Not necessarily. Adams shows that when drivers were made to wear seat belts they drove faster. This could also be because they revisited the "cost benefit" analysis that led them to the balance they struck between getting to their destination quickly and being safe. Now they have a seat belt to protect them in a crash they feel that a new balance can be struck, driving a little faster. If they were offered a way to get to their destination that was identical to driving in every respect except that it was both faster and safer they would take it. No need to increase their risk in some way to satisfy the risk thermostat and get that buzz of danger. This could happen when someone chooses between two driving routes, one both inherently safer and quicker than the other, such as choosing between the nearly empty by-pass and going through the busy centre of town.

This obvious alternative explanation gets no attention in the book, which I think is a major weakness. In later publications I understand that Adams shifts his stated position, towards the idea of revising the cost benefit balance, but he retains the phrase 'risk thermostat.'

Overall, better to look for a more balanced and less crusading discussion of the difficulties of making the general public safer.


Simply a superb book., 02 Aug 2006
Society in general seeks to quantify risk. This book shows why most such exercises are completely futile because of the phenomenon of 'risk compensation'. In brief, make something safer and humans typically respond by taking more risks elsewhere to compensate.

I recommend this book unreservedly. Its one of the very few I have come across which has a supremely important point to make and makes it in a clear, well-argued and compact way, supported by lots of interesting data; a revelation. Buy it now, it is every bit as relevant now as it was when it was written.

A "must-read" book, 27 Jun 2004
It's incredible how many well-meaning attempts to make society "safer" fail, foundering on society's apparent unwillingness to be safe. Adams not only tells us what's going wrong, but actually describes the ways in which risk taking behaviour can be understood and managed.

Of particular interest is the chapter on seat belt laws. Once you've read that, I guarantee you will be hooked.

A Must-read, 28 Mar 2004
I am an economist, and found the nature and subject of this book fascinating. It really is an important and powerful work.

Covers Mainly Actuarial Work, 06 Feb 2003
An average book which covers most of the topics required in Actuarial Science for example annuities, discounting and life insurance.

Sadly, this book does not cover the other important section of mathematical finance required in my university for example the pricing of securities, derivatives, arbitrage and martingales.

This is the book which provides examples about long term investments, time value of money, and pensions, but not the commonly sought after "Black-Scholes" book.

Does anyone think financial markets are fine as they are? I doubt it., 12 Jan 2007
The wheel's invention first took place a few thousands years ago in the the Fertile Crescent region, now occupied by Iran and Iraq. As with any now seemingly obvious invention, it's probable that the development would have encountered resistance, bemusement and mockery from stakeholders. Perhaps, for example, communities of farmhands might have tried to outlaw the wheel because one of its potential utilisations in harvesting may reduce the manual workload. Others may have ridiculed it as unnatural or thought the wheel pointless because of the lack of what we would now call 'roads.'

It is easy to forget that many of our modern goods and services were once abstract ideas requiring invention, innovation, sacrifice, and struggle prior to their acceptance. The realm of risk and finance is no exception, baring in mind that there were no stock markets, futures exchanges or welfare programmes in the Garden of Eden - between then and now human vision and persistence has made them possible.

The author invites us to become economic visionaries ourselves, contemplating where modern facilitative technologies may take risk management in the 21st century. His own conceptualisations feature inequality insurance; house-value insurance; income-linked loans and other notions that may seem illogical at first, but make perfect sense to those with modest understandings of the ebb and flow of economic history.

Each of his concepts are accompanied by practical and theoretical input relating to their enactment. Emphasis is placed on mechanisms developed in the fields of cognitive and social psychology in order to outline means to encourage social acceptance of risk devices. Lessons are also derived from past financial innovations including social security, pension rights and life insurance, which serve as practical guides as well as interesting historical lessons.

The New Financial Order is economics at its best, combining theory, philosophy and history to propose solutions rather than merely identify problems. It takes a lot of courage to play the role of 'financial futurist' and Shiller's effort should certainly be commended!'

A Must-Read!, 29 Apr 2003
Economist Robert Shiller became a household name when he published his previous bestseller Irrational Exuberance just as the dot.com boom was peaking. In The New Financial Order, he capitalizes on his celebrity to put forward a thoughtful, detailed proposal for managing economic risks. This highly readable book portrays a future in which many serious individual financial risks are dispersed to savvy global investors, thanks to technology. Imagine violinists being able to insure their careers in addition to their Stradivarius instruments, developing countries securing generous loans from the first world by tying the repayment schedules to their future GDPs and a revamped tax system preventing the gap between rich and poor from widening. We ....suggest this book to risk-management professionals who want to step back and look at the big picture, as well as to anyone who has a stake in creating new financial products to meet twenty-first century needs.

The argument for rational fatalism, 16 May 2007
I've just finished reading "Risk" by John Adams and "Fooled by Randomness" by Nicholas Taleb. They make good companions. Both are illuminating and refreshingly entertaining. And both have the same main target: proponents of the view that risk is an objective phenomenon that can be measured and managed.

"Risk" Adams contends is a word that refers to a future that exists only in the imagination. It is inescapably subjective. Taleb, who is a New York trader, is especially [...] those who are fooled by randomness - deluded souls who believe that luck can be managed, that future prices can be divined by a study of past prices - and that such divinations will make them rich. The iconic case, with which Taleb has great sport, is the collapse of Long Term Capital Management. Two directors of LTCM, Merton and Scholes, received Nobel prizes for their development of the luck management methods that produced the collapse.

Adams, writing before the fall of LTCM, puts his finger on its cause. Merton and Scholes were not detached scientists observing something that could be objectively measured, they were players in the game, influencing, and being influenced by, all the other players.

Adams' most interesting, and sadly neglected, case study of the interactive nature of risk management is his demolition of the myth of the efficacy of seat belt legislation. Nowhere in the world, he shows, have seat belt laws saved lives. Everywhere they have resulted in a transfer of the burden of risk from those best-protected in cars to the most vulnerable outside cars, pedestrians and cyclists.

Five stars to both Adams and Taleb!

PS Your previous reviewer, Leitch, is wrong on his two "fundamental" points.
1. His belief that the risk associated with the rise and fall of shares is predictable. If he is not persuaded by Adams and Taleb, he might try When Genius Failed: The Rise and Fall of Long-Term Capital Management by Lowenstein, or Googling "Brian Hunter Amaranth" for examples of the disasters experienced by those who shared his belief in the predictability of share prices and natural gas prices.
2. His conclusion that Adams argues that motorists have a fixed "favourite level of risk". One of Adams' most useful insights is that propensity to take risk varies with the perceived rewards of risk taking.

Simply wrong on two fundamental points, 22 Apr 2007
I read "Risk" a couple of weeks ago and quickly realised that it had a lot to say about the author's personal battles down the decades with people who disagreed with him. The endless point scoring and flowery language irritated me.

Having said that, he has two interesting points to make that everyone should know about. One is that people respond to perceived risk changes by becoming more or less careful in response. The other is that this can lead to risk compensation, where a reduction in risk leads to more risky behaviour.

Where I think he has gone fundamentally wrong is on two points.

The first is his insistence that risk cannot be measured. Certainly, behaviour changes in response to perceived risk do make measurement in some situations impossible. However, in other situations, such as the behaviour of a roulette wheel, an inanimate object that does not perceive risk, risk can be measured. Adams infers from the practical impossibility of risk measurement in some important situations that all risk measurement is impossible, which is an over-generalisation. (Perhaps he was thinking of attempts to make the public safer, where his general point would be a reasonable one.) It would have been helpful if he outlined where risk measurement was futile and where helpful measurement was possible rather than just writing off much of the risk management activity going on in the world. Better still, how about suggesting a way to measure whatever it is that people respond to?

The second mistake is to conclude from the risk compensation phenomenon that people have a risk thermostat and seek their favourite level of risk. Not necessarily. Adams shows that when drivers were made to wear seat belts they drove faster. This could also be because they revisited the "cost benefit" analysis that led them to the balance they struck between getting to their destination quickly and being safe. Now they have a seat belt to protect them in a crash they feel that a new balance can be struck, driving a little faster. If they were offered a way to get to their destination that was identical to driving in every respect except that it was both faster and safer they would take it. No need to increase their risk in some way to satisfy the risk thermostat and get that buzz of danger. This could happen when someone chooses between two driving routes, one both inherently safer and quicker than the other, such as choosing between the nearly empty by-pass and going through the busy centre of town.

This obvious alternative explanation gets no attention in the book, which I think is a major weakness. In later publications I understand that Adams shifts his stated position, towards the idea of revising the cost benefit balance, but he retains the phrase 'risk thermostat.'

Overall, better to look for a more balanced and less crusading discussion of the difficulties of making the general public safer.


Simply a superb book., 02 Aug 2006
Society in general seeks to quantify risk. This book shows why most such exercises are completely futile because of the phenomenon of 'risk compensation'. In brief, make something safer and humans typically respond by taking more risks elsewhere to compensate.

I recommend this book unreservedly. Its one of the very few I have come across which has a supremely important point to make and makes it in a clear, well-argued and compact way, supported by lots of interesting data; a revelation. Buy it now, it is every bit as relevant now as it was when it was written.

A "must-read" book, 27 Jun 2004
It's incredible how many well-meaning attempts to make society "safer" fail, foundering on society's apparent unwillingness to be safe. Adams not only tells us what's going wrong, but actually describes the ways in which risk taking behaviour can be understood and managed.

Of particular interest is the chapter on seat belt laws. Once you've read that, I guarantee you will be hooked.

A Must-read, 28 Mar 2004
I am an economist, and found the nature and subject of this book fascinating. It really is an important and powerful work.

Good for the beginner, 22 Feb 2008
While it won't make readers instant programme managers, Think MSP introduces the concept of programme management in a concise and easy to understand way, making it useful for those new to programme management.

An intriguing, but not neccessary new MSP title, 14 Feb 2008
I've recently qualified as an MSP practitioner and am embarking on M_o_R exams - which is how I spotted these new books from TSO.
They advertise as being like a beginner's guide to the MSP framework, and I suppose, in this respect they are successful.
The basics of MSP are expounded, and many of the figures from the main manual are reproduced, but, for me as a practitioner of programme management, the book is too long to be a primer (the pocketbooks are better for this) and too short to replace the manual as a reference material (particularly one which has been annotated as many manuals will be!)
It rather falls between these stools and fails, for me, in the third option I saw for it, as a guide for senior management to understand the basics of the discipline and their part in it.
It's a shame, and the cost is high for what you get.
In a market where there is a bit of a dearth of product for the 2007 MSP syllabus I had hoped for more.

Covers Mainly Actuarial Work, 06 Feb 2003
An average book which covers most of the topics required in Actuarial Science for example annuities, discounting and life insurance.

Sadly, this book does not cover the other important section of mathematical finance required in my university for example the pricing of securities, derivatives, arbitrage and martingales.

This is the book which provides examples about long term investments, time value of money, and pensions, but not the commonly sought after "Black-Scholes" book.

Does anyone think financial markets are fine as they are? I doubt it., 12 Jan 2007
The wheel's invention first took place a few thousands years ago in the the Fertile Crescent region, now occupied by Iran and Iraq. As with any now seemingly obvious invention, it's probable that the development would have encountered resistance, bemusement and mockery from stakeholders. Perhaps, for example, communities of farmhands might have tried to outlaw the wheel because one of its potential utilisations in harvesting may reduce the manual workload. Others may have ridiculed it as unnatural or thought the wheel pointless because of the lack of what we would now call 'roads.'

It is easy to forget that many of our modern goods and services were once abstract ideas requiring invention, innovation, sacrifice, and struggle prior to their acceptance. The realm of risk and finance is no exception, baring in mind that there were no stock markets, futures exchanges or welfare programmes in the Garden of Eden - between then and now human vision and persistence has made them possible.

The author invites us to become economic visionaries ourselves, contemplating where modern facilitative technologies may take risk management in the 21st century. His own conceptualisations feature inequality insurance; house-value insurance; income-linked loans and other notions that may seem illogical at first, but make perfect sense to those with modest understandings of the ebb and flow of economic history.

Each of his concepts are accompanied by practical and theoretical input relating to their enactment. Emphasis is placed on mechanisms developed in the fields of cognitive and social psychology in order to outline means to encourage social acceptance of risk devices. Lessons are also derived from past financial innovations including social security, pension rights and life insurance, which serve as practical guides as well as interesting historical lessons.

The New Financial Order is economics at its best, combining theory, philosophy and history to propose solutions rather than merely identify problems. It takes a lot of courage to play the role of 'financial futurist' and Shiller's effort should certainly be commended!'

A Must-Read!, 29 Apr 2003
Economist Robert Shiller became a household name when he published his previous bestseller Irrational Exuberance just as the dot.com boom was peaking. In The New Financial Order, he capitalizes on his celebrity to put forward a thoughtful, detailed proposal for managing economic risks. This highly readable book portrays a future in which many serious individual financial risks are dispersed to savvy global investors, thanks to technology. Imagine violinists being able to insure their careers in addition to their Stradivarius instruments, developing countries securing generous loans from the first world by tying the repayment schedules to their future GDPs and a revamped tax system preventing the gap between rich and poor from widening. We ....suggest this book to risk-management professionals who want to step back and look at the big picture, as well as to anyone who has a stake in creating new financial products to meet twenty-first century needs.

The argument for rational fatalism, 16 May 2007
I've just finished reading "Risk" by John Adams and "Fooled by Randomness" by Nicholas Taleb. They make good companions. Both are illuminating and refreshingly entertaining. And both have the same main target: proponents of the view that risk is an objective phenomenon that can be measured and managed.

"Risk" Adams contends is a word that refers to a future that exists only in the imagination. It is inescapably subjective. Taleb, who is a New York trader, is especially [...] those who are fooled by randomness - deluded souls who believe that luck can be managed, that future prices can be divined by a study of past prices - and that such divinations will make them rich. The iconic case, with which Taleb has great sport, is the collapse of Long Term Capital Management. Two directors of LTCM, Merton and Scholes, received Nobel prizes for their development of the luck management methods that produced the collapse.

Adams, writing before the fall of LTCM, puts his finger on its cause. Merton and Scholes were not detached scientists observing something that could be objectively measured, they were players in the game, influencing, and being influenced by, all the other players.

Adams' most interesting, and sadly neglected, case study of the interactive nature of risk management is his demolition of the myth of the efficacy of seat belt legislation. Nowhere in the world, he shows, have seat belt laws saved lives. Everywhere they have resulted in a transfer of the burden of risk from those best-protected in cars to the most vulnerable outside cars, pedestrians and cyclists.

Five stars to both Adams and Taleb!

PS Your previous reviewer, Leitch, is wrong on his two "fundamental" points.
1. His belief that the risk associated with the rise and fall of shares is predictable. If he is not persuaded by Adams and Taleb, he might try When Genius Failed: The Rise and Fall of Long-Term Capital Management by Lowenstein, or Googling "Brian Hunter Amaranth" for examples of the disasters experienced by those who shared his belief in the predictability of share prices and natural gas prices.
2. His conclusion that Adams argues that motorists have a fixed "favourite level of risk". One of Adams' most useful insights is that propensity to take risk varies with the perceived rewards of risk taking.

Simply wrong on two fundamental points, 22 Apr 2007
I read "Risk" a couple of weeks ago and quickly realised that it had a lot to say about the author's personal battles down the decades with people who disagreed with him. The endless point scoring and flowery language irritated me.

Having said that, he has two interesting points to make that everyone should know about. One is that people respond to perceived risk changes by becoming more or less careful in response. The other is that this can lead to risk compensation, where a reduction in risk leads to more risky behaviour.

Where I think he has gone fundamentally wrong is on two points.

The first is his insistence that risk cannot be measured. Certainly, behaviour changes in response to perceived risk do make measurement in some situations impossible. However, in other situations, such as the behaviour of a roulette wheel, an inanimate object that does not perceive risk, risk can be measured. Adams infers from the practical impossibility of risk measurement in some important situations that all risk measurement is impossible, which is an over-generalisation. (Perhaps he was thinking of attempts to make the public safer, where his general point would be a reasonable one.) It would have been helpful if he outlined where risk measurement was futile and where helpful measurement was possible rather than just writing off much of the risk management activity going on in the world. Better still, how about suggesting a way to measure whatever it is that people respond to?

The second mistake is to conclude from the risk compensation phenomenon that people have a risk thermostat and seek their favourite level of risk. Not necessarily. Adams shows that when drivers were made to wear seat belts they drove faster. This could also be because they revisited the "cost benefit" analysis that led them to the balance they struck between getting to their destination quickly and being safe. Now they have a seat belt to protect them in a crash they feel that a new balance can be struck, driving a little faster. If they were offered a way to get to their destination that was identical to driving in every respect except that it was both faster and safer they would take it. No need to increase their risk in some way to satisfy the risk thermostat and get that buzz of danger. This could happen when someone chooses between two driving routes, one both inherently safer and quicker than the other, such as choosing between the nearly empty by-pass and going through the busy centre of town.

This obvious alternative explanation gets no attention in the book, which I think is a major weakness. In later publications I understand that Adams shifts his stated position, towards the idea of revising the cost benefit balance, but he retains the phrase 'risk thermostat.'

Overall, better to look for a more balanced and less crusading discussion of the difficulties of making the general public safer.


Simply a superb book., 02 Aug 2006
Society in general seeks to quantify risk. This book shows why most such exercises are completely futile because of the phenomenon of 'risk compensation'. In brief, make something safer and humans typically respond by taking more risks elsewhere to compensate.

I recommend this book unreservedly. Its one of the very few I have come across which has a supremely important point to make and makes it in a clear, well-argued and compact way, supported by lots of interesting data; a revelation. Buy it now, it is every bit as relevant now as it was when it was written.

A "must-read" book, 27 Jun 2004
It's incredible how many well-meaning attempts to make society "safer" fail, foundering on society's apparent unwillingness to be safe. Adams not only tells us what's going wrong, but actually describes the ways in which risk taking behaviour can be understood and managed.

Of particular interest is the chapter on seat belt laws. Once you've read that, I guarantee you will be hooked.

A Must-read, 28 Mar 2004
I am an economist, and found the nature and subject of this book fascinating. It really is an important and powerful work.

Good for the beginner, 22 Feb 2008
While it won't make readers instant programme managers, Think MSP introduces the concept of programme management in a concise and easy to understand way, making it useful for those new to programme management.

An intriguing, but not neccessary new MSP title, 14 Feb 2008
I've recently qualified as an MSP practitioner and am embarking on M_o_R exams - which is how I spotted these new books from TSO.
They advertise as being like a beginner's guide to the MSP framework, and I suppose, in this respect they are successful.
The basics of MSP are expounded, and many of the figures from the main manual are reproduced, but, for me as a practitioner of programme management, the book is too long to be a primer (the pocketbooks are better for this) and too short to replace the manual as a reference material (particularly one which has been annotated as many manuals will be!)
It rather falls between these stools and fails, for me, in the third option I saw for it, as a guide for senior management to understand the basics of the discipline and their part in it.
It's a shame, and the cost is high for what you get.
In a market where there is a bit of a dearth of product for the 2007 MSP syllabus I had hoped for more.

Comprehensive and Balanced Introduction, 27 Aug 2008
It is not often you find a book which successfully bridges mathematics and finance, with the graceful consideration of the practitioner's issues in implementation. This is Hull for credit derivatives.

The math flows very well alongside a narrative which summarizes the story with terse reasoning. The math is not burdened with notation and is instead linked nicely with financial concepts. This is all reinforced with examples which bring out subtleties of pricing and market conventions. The author makes copious references to further reading, but does not make detours which would detract from explanatory cohesion.

The book can not be all things to all people, however, so some veterans to structured credit may find the treatment a bit beneath their level of expertise. The most appropriate audience would be graduates of math-finance courses who need a thorough introduction to structured credit as it is practiced in banks.

Covers Mainly Actuarial Work, 06 Feb 2003
An average book which covers most of the topics required in Actuarial Science for example annuities, discounting and life insurance.

Sadly, this book does not cover the other important section of mathematical finance required in my university for example the pricing of securities, derivatives, arbitrage and martingales.

This is the book which provides examples about long term investments, time value of money, and pensions, but not the commonly sought after "Black-Scholes" book.

Does anyone think financial markets are fine as they are? I doubt it., 12 Jan 2007
The wheel's invention first took place a few thousands years ago in the the Fertile Crescent region, now occupied by Iran and Iraq. As with any now seemingly obvious invention, it's probable that the development would have encountered resistance, bemusement and mockery from stakeholders. Perhaps, for example, communities of farmhands might have tried to outlaw the wheel because one of its potential utilisations in harvesting may reduce the manual workload. Others may have ridiculed it as unnatural or thought the wheel pointless because of the lack of what we would now call 'roads.'

It is easy to forget that many of our modern goods and services were once abstract ideas requiring invention, innovation, sacrifice, and struggle prior to their acceptance. The realm of risk and finance is no exception, baring in mind that there were no stock markets, futures exchanges or welfare programmes in the Garden of Eden - between then and now human vision and persistence has made them possible.

The author invites us to become economic visionaries ourselves, contemplating where modern facilitative technologies may take risk management in the 21st century. His own conceptualisations feature inequality insurance; house-value insurance; income-linked loans and other notions that may seem illogical at first, but make perfect sense to those with modest understandings of the ebb and flow of economic history.

Each of his concepts are accompanied by practical and theoretical input relating to their enactment. Emphasis is placed on mechanisms developed in the fields of cognitive and social psychology in order to outline means to encourage social acceptance of risk devices. Lessons are also derived from past financial innovations including social security, pension rights and life insurance, which serve as practical guides as well as interesting historical lessons.

The New Financial Order is economics at its best, combining theory, philosophy and history to propose solutions rather than merely identify problems. It takes a lot of courage to play the role of 'financial futurist' and Shiller's effort should certainly be commended!'

A Must-Read!, 29 Apr 2003
Economist Robert Shiller became a household name when he published his previous bestseller Irrational Exuberance just as the dot.com boom was peaking. In The New Financial Order, he capitalizes on his celebrity to put forward a thoughtful, detailed proposal for managing economic risks. This highly readable book portrays a future in which many serious individual financial risks are dispersed to savvy global investors, thanks to technology. Imagine violinists being able to insure their careers in addition to their Stradivarius instruments, developing countries securing generous loans from the first world by tying the repayment schedules to their future GDPs and a revamped tax system preventing the gap between rich and poor from widening. We ....suggest this book to risk-management professionals who want to step back and look at the big picture, as well as to anyone who has a stake in creating new financial products to meet twenty-first century needs.

The argument for rational fatalism, 16 May 2007
I've just finished reading "Risk" by John Adams and "Fooled by Randomness" by Nicholas Taleb. They make good companions. Both are illuminating and refreshingly entertaining. And both have the same main target: proponents of the view that risk is an objective phenomenon that can be measured and managed.

"Risk" Adams contends is a word that refers to a future that exists only in the imagination. It is inescapably subjective. Taleb, who is a New York trader, is especially [...] those who are fooled by randomness - deluded souls who believe that luck can be managed, that future prices can be divined by a study of past prices - and that such divinations will make them rich. The iconic case, with which Taleb has great sport, is the collapse of Long Term Capital Management. Two directors of LTCM, Merton and Scholes, received Nobel prizes for their development of the luck management methods that produced the collapse.

Adams, writing before the fall of LTCM, puts his finger on its cause. Merton and Scholes were not detached scientists observing something that could be objectively measured, they were players in the game, influencing, and being influenced by, all the other players.

Adams' most interesting, and sadly neglected, case study of the interactive nature of risk management is his demolition of the myth of the efficacy of seat belt legislation. Nowhere in the world, he shows, have seat belt laws saved lives. Everywhere they have resulted in a transfer of the burden of risk from those best-protected in cars to the most vulnerable outside cars, pedestrians and cyclists.

Five stars to both Adams and Taleb!

PS Your previous reviewer, Leitch, is wrong on his two "fundamental" points.
1. His belief that the risk associated with the rise and fall of shares is predictable. If he is not persuaded by Adams and Taleb, he might try When Genius Failed: The Rise and Fall of Long-Term Capital Management by Lowenstein, or Googling "Brian Hunter Amaranth" for examples of the disasters experienced by those who shared his belief in the predictability of share prices and natural gas prices.
2. His conclusion that Adams argues that motorists have a fixed "favourite level of risk". One of Adams' most useful insights is that propensity to take risk varies with the perceived rewards of risk taking.

Simply wrong on two fundamental points, 22 Apr 2007
I read "Risk" a couple of weeks ago and quickly realised that it had a lot to say about the author's personal battles down the decades with people who disagreed with him. The endless point scoring and flowery language irritated me.

Having said that, he has two interesting points to make that everyone should know about. One is that people respond to perceived risk changes by becoming more or less careful in response. The other is that this can lead to risk compensation, where a reduction in risk leads to more risky behaviour.

Where I think he has gone fundamentally wrong is on two points.

The first is his insistence that risk cannot be measured. Certainly, behaviour changes in response to perceived risk do make measurement in some situations impossible. However, in other situations, such as the behaviour of a roulette wheel, an inanimate object that does not perceive risk, risk can be measured. Adams infers from the practical impossibility of risk measurement in some important situations that all risk measurement is impossible, which is an over-generalisation. (Perhaps he was thinking of attempts to make the public safer, where his general point would be a reasonable one.) It would have been helpful if he outlined where risk measurement was futile and where helpful measurement was possible rather than just writing off much of the risk management activity going on in the world. Better still, how about suggesting a way to measure whatever it is that people respond to?

The second mistake is to conclude from the risk compensation phenomenon that people have a risk thermostat and seek their favourite level of risk. Not necessarily. Adams shows that when drivers were made to wear seat belts they drove faster. This could also be because they revisited the "cost benefit" analysis that led them to the balance they struck between getting to their destination quickly and being safe. Now they have a seat belt to protect them in a crash they feel that a new balance can be struck, driving a little faster. If they were offered a way to get to their destination that was identical to driving in every respect except that it was both faster and safer they would take it. No need to increase their risk in some way to satisfy the risk thermostat and get that buzz of danger. This could happen when someone chooses between two driving routes, one both inherently safer and quicker than the other, such as choosing between the nearly empty by-pass and going through the busy centre of town.

This obvious alternative explanation gets no attention in the book, which I think is a major weakness. In later publications I understand that Adams shifts his stated position, towards the idea of revising the cost benefit balance, but he retains the phrase 'risk thermostat.'

Overall, better to look for a more balanced and less crusading discussion of the difficulties of making the general public safer.


Simply a superb book., 02 Aug 2006
Society in general seeks to quantify risk. This book shows why most such exercises are completely futile because of the phenomenon of 'risk compensation'. In brief, make something safer and humans typically respond by taking more risks elsewhere to compensate.

I recommend this book unreservedly. Its one of the very few I have come across which has a supremely important point to make and makes it in a clear, well-argued and compact way, supported by lots of interesting data; a revelation. Buy it now, it is every bit as relevant now as it was when it was written.

A "must-read" book, 27 Jun 2004
It's incredible how many well-meaning attempts to make society "safer" fail, foundering on society's apparent unwillingness to be safe. Adams not only tells us what's going wrong, but actually describes the ways in which risk taking behaviour can be understood and managed.

Of particular interest is the chapter on seat belt laws. Once you've read that, I guarantee you will be hooked.

A Must-read, 28 Mar 2004
I am an economist, and found the nature and subject of this book fascinating. It really is an important and powerful work.

Good for the beginner, 22 Feb 2008
While it won't make readers instant programme managers, Think MSP introduces the concept of programme management in a concise and easy to understand way, making it useful for those new to programme management.

An intriguing, but not neccessary new MSP title, 14 Feb 2008
I've recently qualified as an MSP practitioner and am embarking on M_o_R exams - which is how I spotted these new books from TSO.
They advertise as being like a beginner's guide to the MSP framework, and I suppose, in this respect they are successful.
The basics of MSP are expounded, and many of the figures from the main manual are reproduced, but, for me as a practitioner of programme management, the book is too long to be a primer (the pocketbooks are better for this) and too short to replace the manual as a reference material (particularly one which has been annotated as many manuals will be!)
It rather falls between these stools and fails, for me, in the third option I saw for it, as a guide for senior management to understand the basics of the discipline and their part in it.
It's a shame, and the cost is high for what you get.
In a market where there is a bit of a dearth of product for the 2007 MSP syllabus I had hoped for more.

Comprehensive and Balanced Introduction, 27 Aug 2008
It is not often you find a book which successfully bridges mathematics and finance, with the graceful consideration of the practitioner's issues in implementation. This is Hull for credit derivatives.

The math flows very well alongside a narrative which summarizes the story with terse reasoning. The math is not burdened with notation and is instead linked nicely with financial concepts. This is all reinforced with examples which bring out subtleties of pricing and market conventions. The author makes copious references to further reading, but does not make detours which would detract from explanatory cohesion.

The book can not be all things to all people, however, so some veterans to structured credit may find the treatment a bit beneath their level of expertise. The most appropriate audience would be graduates of math-finance courses who need a thorough introduction to structured credit as it is practiced in banks.

Very Helpful, 12 Sep 2006
There are plenty of books out there for professionals regarding different types of risk assessment tools and methods, but Bryony's book helps you to frame the results of your actuarial models, risk assessment tools and corrobrative information into an integrated and cohesive whole. Its easy to read and leads you as a professional, to carefully question the basis upon which you make predictions about the likehood of violent behaviour occuring. More than any other book I have read on risk assessment this is the one that gets you to THINK about what you are doing. Buy it, read it, use it.

Covers Mainly Actuarial Work, 06 Feb 2003
An average book which covers most of the topics required in Actuarial Science for example annuities, discounting and life insurance.

Sadly, this book does not cover the other important section of mathematical finance required in my university for example the pricing of securities, derivatives, arbitrage and martingales.

This is the book which provides examples about long term investments, time value of money, and pensions, but not the commonly sought after "Black-Scholes" book.

Does anyone think financial markets are fine as they are? I doubt it., 12 Jan 2007
The wheel's invention first took place a few thousands years ago in the the Fertile Crescent region, now occupied by Iran and Iraq. As with any now seemingly obvious invention, it's probable that the development would have encountered resistance, bemusement and mockery from stakeholders. Perhaps, for example, communities of farmhands might have tried to outlaw the wheel because one of its potential utilisations in harvesting may reduce the manual workload. Others may have ridiculed it as unnatural or thought the wheel pointless because of the lack of what we would now call 'roads.'

It is easy to forget that many of our modern goods and services were once abstract ideas requiring invention, innovation, sacrifice, and struggle prior to their acceptance. The realm of risk and finance is no exception, baring in mind that there were no stock markets, futures exchanges or welfare programmes in the Garden of Eden - between then and now human vision and persistence has made them possible.

The author invites us to become economic visionaries ourselves, contemplating where modern facilitative technologies may take risk management in the 21st century. His own conceptualisations feature inequality insurance; house-value insurance; income-linked loans and other notions that may seem illogical at first, but make perfect sense to those with modest understandings of the ebb and flow of economic history.

Each of his concepts are accompanied by practical and theoretical input relating to their enactment. Emphasis is placed on mechanisms developed in the fields of cognitive and social psychology in order to outline means to encourage social acceptance of risk devices. Lessons are also derived from past financial innovations including social security, pension rights and life insurance, which serve as practical guides as well as interesting historical lessons.

The New Financial Order is economics at its best, combining theory, philosophy and history to propose solutions rather than merely identify problems. It takes a lot of courage to play the role of 'financial futurist' and Shiller's effort should certainly be commended!'

A Must-Read!, 29 Apr 2003
Economist Robert Shiller became a household name when he published his previous bestseller Irrational Exuberance just as the dot.com boom was peaking. In The New Financial Order, he capitalizes on his celebrity to put forward a thoughtful, detailed proposal for managing economic risks. This highly readable book portrays a future in which many serious individual financial risks are dispersed to savvy global investors, thanks to technology. Imagine violinists being able to insure their careers in addition to their Stradivarius instruments, developing countries securing generous loans from the first world by tying the repayment schedules to their future GDPs and a revamped tax system preventing the gap between rich and poor from widening. We ....suggest this book to risk-management professionals who want to step back and look at the big picture, as well as to anyone who has a stake in creating new financial products to meet twenty-first century needs.

The argument for rational fatalism, 16 May 2007
I've just finished reading "Risk" by John Adams and "Fooled by Randomness" by Nicholas Taleb. They make good companions. Both are illuminating and refreshingly entertaining. And both have the same main target: proponents of the view that risk is an objective phenomenon that can be measured and managed.

"Risk" Adams contends is a word that refers to a future that exists only in the imagination. It is inescapably subjective. Taleb, who is a New York trader, is especially [...] those who are fooled by randomness - deluded souls who believe that luck can be managed, that future prices can be divined by a study of past prices - and that such divinations will make them rich. The iconic case, with which Taleb has great sport, is the collapse of Long Term Capital Management. Two directors of LTCM, Merton and Scholes, received Nobel prizes for their development of the luck management methods that produced the collapse.

Adams, writing before the fall of LTCM, puts his finger on its cause. Merton and Scholes were not detached scientists observing something that could be objectively measured, they were players in the game, influencing, and being influenced by, all the other players.

Adams' most interesting, and sadly neglected, case study of the interactive nature of risk management is his demolition of the myth of the efficacy of seat belt legislation. Nowhere in the world, he shows, have seat belt laws saved lives. Everywhere they have resulted in a transfer of the burden of risk from those best-protected in cars to the most vulnerable outside cars, pedestrians and cyclists.

Five stars to both Adams and Taleb!

PS Your previous reviewer, Leitch, is wrong on his two "fundamental" points.
1. His belief that the risk associated with the rise and fall of shares is predictable. If he is not persuaded by Adams and Taleb, he might try When Genius Failed: The Rise and Fall of Long-Term Capital Management by Lowenstein, or Googling "Brian Hunter Amaranth" for examples of the disasters experienced by those who shared his belief in the predictability of share prices and natural gas prices.
2. His conclusion that Adams argues that motorists have a fixed "favourite level of risk". One of Adams' most useful insights is that propensity to take risk varies with the perceived rewards of risk taking.

Simply wrong on two fundamental points, 22 Apr 2007
I read "Risk" a couple of weeks ago and quickly realised that it had a lot to say about the author's personal battles down the decades with people who disagreed with him. The endless point scoring and flowery language irritated me.

Having said that, he has two interesting points to make that everyone should know about. One is that people respond to perceived risk changes by becoming more or less careful in response. The other is that this can lead to risk compensation, where a reduction in risk leads to more risky behaviour.

Where I think he has gone fundamentally wrong is on two points.

The first is his insistence that risk cannot be measured. Certainly, behaviour changes in response to perceived risk do make measurement in some situations impossible. However, in other situations, such as the behaviour of a roulette wheel, an inanimate object that does not perceive risk, risk can be measured. Adams infers from the practical impossibility of risk measurement in some important situations that all risk measurement is impossible, which is an over-generalisation. (Perhaps he was thinking of attempts to make the public safer, where his general point would be a reasonable one.) It would have been helpful if he outlined where risk measurement was futile and where helpful measurement was possible rather than just writing off much of the risk management activity going on in the world. Better still, how about suggesting a way to measure whatever it is that people respond to?

The second mistake is to conclude from the risk compensation phenomenon that people have a risk thermostat and seek their favourite level of risk. Not necessarily. Adams shows that when drivers were made to wear seat belts they drove faster. This could also be because they revisited the "cost benefit" analysis that led them to the balance they struck between getting to their destination quickly and being safe. Now they have a seat belt to protect them in a crash they feel that a new balance can be struck, driving a little faster. If they were offered a way to get to their destination that was identical to driving in every respect except that it was both faster and safer they would take it. No need to increase their risk in some way to satisfy the risk thermostat and get that buzz of danger. This could happen when someone chooses between two driving routes, one both inherently safer and quicker than the other, such as choosing between the nearly empty by-pass and going through the busy centre of town.

This obvious alternative explanation gets no attention in the book, which I think is a major weakness. In later publications I understand that Adams shifts his stated position, towards the idea of revising the cost benefit balance, but he retains the phrase 'risk thermostat.'

Overall, better to look for a more balanced and less crusading discussion of the difficulties of making the general public safer.


Simply a superb book., 02 Aug 2006
Society in general seeks to quantify risk. This book shows why most such exercises are completely futile because of the phenomenon of 'risk compensation'. In brief, make something safer and humans typically respond by taking more risks elsewhere to compensate.

I recommend this book unreservedly. Its one of the very few I have come across which has a supremely important point to make and makes it in a clear, well-argued and compact way, supported by lots of interesting data; a revelation. Buy it now, it is every bit as relevant now as it was when it was written.

A "must-read" book, 27 Jun 2004
It's incredible how many well-meaning attempts to make society "safer" fail, foundering on society's apparent unwillingness to be safe. Adams not only tells us what's going wrong, but actually describes the ways in which risk taking behaviour can be understood and managed.

Of particular interest is the chapter on seat belt laws. Once you've read that, I guarantee you will be hooked.

A Must-read, 28 Mar 2004
I am an economist, and found the nature and subject of this book fascinating. It really is an important and powerful work.

Good for the beginner, 22 Feb 2008
While it won't make readers instant programme managers, Think MSP introduces the concept of programme management in a concise and easy to understand way, making it useful for those new to programme management.

An intriguing, but not neccessary new MSP title, 14 Feb 2008
I've recently qualified as an MSP practitioner and am embarking on M_o_R exams - which is how I spotted these new books from TSO.
They advertise as being like a beginner's guide to the MSP framework, and I suppose, in this respect they are successful.
The basics of MSP are expounded, and many of the figures from the main manual are reproduced, but, for me as a practitioner of programme management, the book is too long to be a primer (the pocketbooks are better for this) and too short to replace the manual as a reference material (particularly one which has been annotated as many manuals will be!)
It rather falls between these stools and fails, for me, in the third option I saw for it, as a guide for senior management to understand the basics of the discipline and their part in it.
It's a shame, and the cost is high for what you get.
In a market where there is a bit of a dearth of product for the 2007 MSP syllabus I had hoped for more.

Comprehensive and Balanced Introduction, 27 Aug 2008
It is not often you find a book which successfully bridges mathematics and finance, with the graceful consideration of the practitioner's issues in implementation. This is Hull for credit derivatives.

The math flows very well alongside a narrative which summarizes the story with terse reasoning. The math is not burdened with notation and is instead linked nicely with financial concepts. This is all reinforced with examples which bring out subtleties of pricing and market conventions. The author makes copious references to further reading, but does not make detours which would detract from explanatory cohesion.

The book can not be all things to all people, however, so some veterans to structured credit may find the treatment a bit beneath their level of expertise. The most appropriate audience would be graduates of math-finance courses who need a thorough introduction to structured credit as it is practiced in banks.

Very Helpful, 12 Sep 2006
There are plenty of books out there for professionals regarding different types of risk assessment tools and methods, but Bryony's book helps you to frame the results of your actuarial models, risk assessment tools and corrobrative information into an integrated and cohesive whole. Its easy to read and leads you as a professional, to carefully question the basis upon which you make predictions about the likehood of violent behaviour occuring. More than any other book I have read on risk assessment this is the one that gets you to THINK about what you are doing. Buy it, read it, use it.

A History of Probability & its Applications, 04 Jul 2006
This is a delightful and eminently readable history of probability and its applications, written by someone with a professional interest in, and an evident love for, his subject. Seasoned with anecdotes and asides, it was an education and a pleasure to read this account of a topic which enters into so many aspects of our lives, actuarial, economic or philosophical.

Outstanding Book of Clarity and Depth., 14 Nov 2003
There are books which the subject at hand could easily bore the lay person after the first chapter, however this is definetly not one of them. Shamefully, knowing little arithmetic(never mind maths), I was pleasantly ensnared in this feast of probability. It is written clearly and coherently and introduces the reader to a whole universe of number subjects which fascinated me from start to finish. From Pascals triangle to John Nash's work on game theory, I understood broadly, every concept the author introduced.
Whether you are a student of Maths or Philosophy,History or Science, a bookworm or an occassionite, this book is for you.
I highly recommend this masterpiece.

Everything is a risk, 03 Jul 2003
Are you a private investor looking for handy tips on hot stocks? Good luck, but this might not be for you. You won't find get-rick-quick advice in this scholarly work, but you might learn why you're drawn to actively managed funds despite their history of market underperformance. You'll also be enriched by the stories and depth of research here. Another reviewer objects that Bernstein credits the Greek mathematicians with less understanding of probability than a school child. It seemed to me that Bernstein is saying something different: Even if Socrates had a private opinion about the frequency of VI on an astragali roll it wasn't a respectable part of his intellectual framework. He might of known it, but he refused to study it.

The author clearly considers his subject the most important in history, and in 330 pages identifies every significant step in the development of *thinking about* risk. In some ways though, the focus is too narrow. It becomes clear towards the end of the book that he has been building up the strands of probability theory as precursors to the 'taming of risk' in modern financial theory. I was hoping that an ambitious work on the history of probability would include the discovery that all of reality is based on chance, but you can search the index for 'Quantum Mechanics' in vain. (However 'Quant' is there - Bernstein himself was once a financial mathematician.)

In a subject as huge as risk there will always be more to say, and what is included here makes a cohesive whole whilst being important or interesting in it parts. Ok, maybe you don't love chance as much as me - what you need to know about portfolio theory is in Chapter 12 onwards - you'll still have 140 pages of important results. It's even topical, Kahneman's Prospect Theory is covered in detail (and he won the Nobel last year).

A superb popularisation of a complex subject, 17 Dec 1999
Bernstein has managed to take a subject which at first sight seems intensely boring, and has made it fascinating.

Whether or not you have any interest in Risk, Statistics or Econimics, you owe it to yourself to read this book. It is quite simply a "Ripping Yarn". Its greatness lies in Bernstein's ability to tell the story in an accessible manner, without dumbing down the essential facts.

Let me say it again: Read this book because it is a fascinating and well written story. The fact you will know a lot more about Risk at the end of it is an incidental, but very welcome, extra.

An easy reading, too easy maybe..., 30 Sep 1999
This book is about the history of risk, but you learn a lot more about history than about risk. The book is not too big compared with the broadness of the topic developed (which is positive), but volume = broadness*depht; you now know which dimension is lacking. However, the four crowns are justified by the idea of the book and the fact that Burnstein is a good writer.

Covers Mainly Actuarial Work, 06 Feb 2003
An average book which covers most of the topics required in Actuarial Science for example annuities, discounting and life insurance.

Sadly, this book does not cover the other important section of mathematical finance required in my university for example the pricing of securities, derivatives, arbitrage and martingales.

This is the book which provides examples about long term investments, time value of money, and pensions, but not the commonly sought after "Black-Scholes" book.

Does anyone think financial markets are fine as they are? I doubt it., 12 Jan 2007
The wheel's invention first took place a few thousands years ago in the the Fertile Crescent region, now occupied by Iran and Iraq. As with any now seemingly obvious invention, it's probable that the development would have encountered resistance, bemusement and mockery from stakeholders. Perhaps, for example, communities of farmhands might have tried to outlaw the wheel because one of its potential utilisations in harvesting may reduce the manual workload. Others may have ridiculed it as unnatural or thought the wheel pointless because of the lack of what we would now call 'roads.'

It is easy to forget that many of our modern goods and services were once abstract ideas requiring invention, innovation, sacrifice, and struggle prior to their acceptance. The realm of risk and finance is no exception, baring in mind that there were no stock markets, futures exchanges or welfare programmes in the Garden of Eden - between then and now human vision and persistence has made them possible.

The author invites us to become economic visionaries ourselves, contemplating where modern facilitative technologies may take risk management in the 21st century. His own conceptualisations feature inequality insurance; house-value insurance; income-linked loans and other notions that may seem illogical at first, but make perfect sense to those with modest understandings of the ebb and flow of economic history.

Each of his concepts are accompanied by practical and theoretical input relating to their enactment. Emphasis is placed on mechanisms developed in the fields of cognitive and social psychology in order to outline means to encourage social acceptance of risk devices. Lessons are also derived from past financial innovations including social security, pension rights and life insurance, which serve as practical guides as well as interesting historical lessons.

The New Financial Order is economics at its best, combining theory, philosophy and history to propose solutions rather than merely identify problems. It takes a lot of courage to play the role of 'financial futurist' and Shiller's effort should certainly be commended!'

A Must-Read!, 29 Apr 2003
Economist Robert Shiller became a household name when he published his previous bestseller Irrational Exuberance just as the dot.com boom was peaking. In The New Financial Order, he capitalizes on his celebrity to put forward a thoughtful, detailed proposal for managing economic risks. This highly readable book portrays a future in which many serious individual financial risks are dispersed to savvy global investors, thanks to technology. Imagine violinists being able to insure their careers in addition to their Stradivarius instruments, developing countries securing generous loans from the first world by tying the repayment schedules to their future GDPs and a revamped tax system preventing the gap between rich and poor from widening. We ....suggest this book to risk-management professionals who want to step back and look at the big picture, as well as to anyone who has a stake in creating new financial products to meet twenty-first century needs.

The argument for rational fatalism, 16 May 2007
I've just finished reading "Risk" by John Adams and "Fooled by Randomness" by Nicholas Taleb. They make good companions. Both are illuminating and refreshingly entertaining. And both have the same main target: proponents of the view that risk is an objective phenomenon that can be measured and managed.

"Risk" Adams contends is a word that refers to a future that exists only in the imagination. It is inescapably subjective. Taleb, who is a New York trader, is especially [...] those who are fooled by randomness - deluded souls who believe that luck can be managed, that future prices can be divined by a study of past prices - and that such divinations will make them rich. The iconic case, with which Taleb has great sport, is the collapse of Long Term Capital Management. Two directors of LTCM, Merton and Scholes, received Nobel prizes for their development of the luck management methods that produced the collapse.

Adams, writing before the fall of LTCM, puts his finger on its cause. Merton and Scholes were not detached scientists observing something that could be objectively measured, they were players in the game, influencing, and being influenced by, all the other players.

Adams' most interesting, and sadly neglected, case study of the interactive nature of risk management is his demolition of the myth of the efficacy of seat belt legislation. Nowhere in the world, he shows, have seat belt laws saved lives. Everywhere they have resulted in a transfer of the burden of risk from those best-protected in cars to the most vulnerable outside cars, pedestrians and cyclists.

Five stars to both Adams and Taleb!

PS Your previous reviewer, Leitch, is wrong on his two "fundamental" points.
1. His belief that the risk associated with the rise and fall of shares is predictable. If he is not persuaded by Adams and Taleb, he might try When Genius Failed: The Rise and Fall of Long-Term Capital Management by Lowenstein, or Googling "Brian Hunter Amaranth" for examples of the disasters experienced by those who shared his belief in the predictability of share prices and natural gas prices.
2. His conclusion that Adams argues that motorists have a fixed "favourite level of risk". One of Adams' most useful insights is that propensity to take risk varies with the perceived rewards of risk taking.

Simply wrong on two fundamental points, 22 Apr 2007
I read "Risk" a couple of weeks ago and quickly realised that it had a lot to say about the author's personal battles down the decades with people who disagreed with him. The endless point scoring and flowery language irritated me.

Having said that, he has two interesting points to make that everyone should know about. One is that people respond to perceived risk changes by becoming more or less careful in response. The other is that this can lead to risk compensation, where a reduction in risk leads to more risky behaviour.

Where I think he has gone fundamentally wrong is on two points.

The first is his insistence that risk cannot be measured. Certainly, behaviour changes in response to perceived risk do make measurement in some situations impossible. However, in other situations, such as the behaviour of a roulette wheel, an inanimate object that does not perceive risk, risk can be measured. Adams infers from the practical impossibility of risk measurement in some important situations that all risk measurement is impossible, which is an over-generalisation. (Perhaps he was thinking of attempts to make the public safer, where his general point would be a reasonable one.) It would have been helpful if he outlined where risk measurement was futile and where helpful measurement was possible rather than just writing off much of the risk management activity going on in the world. Better still, how about suggesting a way to measure whatever it is that people respond to?

The second mistake is to conclude from the risk compensation phenomenon that people have a risk thermostat and seek their favourite level of risk. Not necessarily. Adams shows that when drivers were made to wear seat belts they drove faster. This could also be because they revisited the "cost benefit" analysis that led them to the balance they struck between getting to their destination quickly and being safe. Now they have a seat belt to protect them in a crash they feel that a new balance can be struck, driving a little faster. If they were offered a way to get to their destination that was identical to driving in every respect except that it was both faster and safer they would take it. No need to increase their risk in some way to satisfy the risk thermostat and get that buzz of danger. This could happen when someone chooses between two driving routes, one both inherently safer and quicker than the other, such as choosing between the nearly empty by-pass and going through the busy centre of town.

This obvious alternative explanation gets no attention in the book, which I think is a major weakness. In later publications I understand that Adams shifts his stated position, towards the idea of revising the cost benefit balance, but he retains the phrase 'risk thermostat.'

Overall, better to look for a more balanced and less crusading discussion of the difficulties of making the general public safer.


Simply a superb book., 02 Aug 2006
Society in general seeks to quantify risk. This book shows why most such exercises are completely futile because of the phenomenon of 'risk compensation'. In brief, make something safer and humans typically respond by taking more risks elsewhere to compensate.

I recommend this book unreservedly. Its one of the very few I have come across which has a supremely important point to make and makes it in a clear, well-argued and compact way, supported by lots of interesting data; a revelation. Buy it now, it is every bit as relevant now as it was when it was written.

A "must-read" book, 27 Jun 2004
It's incredible how many well-meaning attempts to make society "safer" fail, foundering on society's apparent unwillingness to be safe. Adams not only tells us what's going wrong, but actually describes the ways in which risk taking behaviour can be understood and managed.

Of particular interest is the chapter on seat belt laws. Once you've read that, I guarantee you will be hooked.

A Must-read, 28 Mar 2004
I am an economist, and found the nature and subject of