28 Captivating Peter L. Bernstein Quotes

As the author and co-author of over a dozen books, Peter L. Bernstein was a well known educator, financial historian, and economist best known for communicating investment economics to the public. A New York City native, Bernstein served on the Visiting Committee to the Economics Department of Harvard University. Here is a look at some of the most prominent Peter L. Bernstein quotes from his life.

“Discontinuities, irregularities, and volatilities seem to be proliferating rather than diminishing.”

“Fear of harm ought to be proportional not merely to the gravity of the harm, but also to the probability of the event.”

“Game theory says that the true source of uncertainty lies in the intentions of others.”

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

“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.”

“It was a time for scientists to wipe the metaphysical dust from their eyes.”

“It would follow that cutting your losses is also a good idea, but investors hate to take losses, because, tax considerations aside, a loss taken is an acknowledgment of error.”

“Life is a collection of similarities rather than identities; no single observation is a perfect example of generality.”

“Loss-aversion combined with ego leads investors to gamble by clinging to their mistakes in the fond hope that some day the market will vindicate their judgment and make them whole.”

“Markets look a lot less efficient from the banks of the Hudson than from the banks of the Charles.”

“One winter night during one of the many German air raids on Moscow in World War II, a distinguished Soviet professor of statistics showed up in his local air-raid shelter.”

“Our lives teem with numbers, but we sometimes forget that numberss are only tools. They have no soul; they may indeed become fetishes.”

“So we pour in data from the past to fuel the decision-making mechanisms created by our models, be they linear or nonlinear.”

“The essence of risk management lies in maximizing the areas where we have some control over the outcome while minimizing the areas where we have absolutely no control over the outcome and the linkage between effect and cause is hidden from us.”

“The information you have is not the information you want. The information you want is not the information you need. The information you need is not the information you can obtain. The information you can obtain costs more than you want to pay.”

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

“The prevalence of surprise in the world of business is evidence that uncertainty is more likely to prevail than mathematical probability.”

“The prospect of getting rich is highly motivating, and few people get rich without taking a gamble.”

“The real trouble with this world of ours is not that it is an unreasonable world, nor even that it is a reasonable one. The commonest kind of trouble is that it is nearly reasonable, but not quite.”

“The utility resulting from any small increase in wealth will be inversely proportionate to the quantity of goods previously possessed.”

“The word ‘risk’ derives from the early Italian risicare, which means ‘to dare’. In this sense, risk is a choice rather than a fate. The actions we dare to take, which depend on how free we are to make choices, are what the story of risk is all about.”

“This is the essence of risk aversion—that is, how far we are willing to go in making decisions that may provoke others to make decisions that will have adverse consequences for us.”

“Time matters most when decisions are irreversible. And yet many irreversible decisions must be made on the basis of incomplete information.”

“We are by now well into the eighteenth century, when the Enlightenment identified the search for knowledge as the highest form of human activity.”

“We are prisoners of the future because we will be ensnared by our past.”

“We could turn this assertion around and state that a decision should involve the strength of our desire for a particular outcome as well as the degree of our belief about the probability of that outcome.”

“We have gold because we cannot trust Governments.”

Here is a discussion with Peter L. Bernstein as he talks about the topic of risk. As an American economist, Bernstein had a reputation of being an expert on asset allocation, market history, and risk management.

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