📖Against the Gods: The Remarkable Story of Risk — Peter L. Bernstein

The editor takes you into the history of "risk"

🌍 Preface: Why should you watch "Against the Gods"?

One of the most familiar words for Hong Kong residents is "risk." Whether it's stock trading, buying a property, starting a business, or even daily life, we all deal with risk. Peter L. Bernstein's book "Against the Gods," often translated into Chinese as " Challenging the Gods " or "The Story of Risk," is a book dedicated to the history and philosophy of risk management .

When I first read it, I felt like I was reading a financial and philosophical encyclopedia. The author takes you from ancient times to the present day, exploring the transition from "resignation to fate" to "calculated risk," and then exploring how statistics, mathematics, and psychology are applied to manage risk in the financial markets. For Hong Kong people, this book is like a "secret manual of risk management and thinking."

📘 Book Background

• Author : Peter L. Bernstein (1919–2009), renowned financial historian and economic advisor
• Publication Date : 1996
• Topics : Risk Management, Mathematics, History of Finance, Philosophy
• Positioning : Non-fiction narrative, turning historical figures and theories into stories, making it easy for readers to enter

The author uses a storytelling technique to describe how humans gradually overcome "fate" and "divine will" and rely on mathematics, science, and rationality to understand the uncertainty in the world🌌.

🧠 Topic 1: The Origin of Risk Concept

In ancient society, people believed that everything in life was arranged by gods. Whether it was the harvest, the victory or defeat in a war, or the fortune or misfortune in life, it was all "destined by heaven"🙏.

It wasn't until the Renaissance that humans began to develop probability theory, which established that different events occur with patterns and probabilities. This shift seemed to break the mold of fatalism and make risk a concept that could be calculated and managed.

👉 Editor's take: This shift is equivalent to going from "relying on luck" to "using statistics to calculate the probability of winning."

🎲 Theme 2: The Revolution of Mathematics and Probability

1. The birth of probability theory 🎲

In the 17th century, Pascal and Fermat discussed gambling and pioneered the theory of probability. This was the first time humans used mathematical methods to deal with uncertainty.

2. The Law of Large Numbers 🔢

Jacob Bernoulli proposed the "Law of Large Numbers," which states that the larger the sample size, the closer the result is to the true probability. This concept has become fundamental to insurance, finance, and statistics.

👉 Editor's perspective: Insurance companies don't rely on luck, but on statistics. When Hong Kong residents buy health insurance, the underlying risk allocation is calculated using mathematical models.

📊 Theme 3: The Evolution of Finance and Risk Management

1. The birth of investment theory 💹

Harry Markowitz proposed "Modern Portfolio Theory", which uses mathematical methods to diversify risks.

2. Derivatives and options pricing 📈

The Black-Scholes Model enabled financial markets to accurately price options, driving explosive growth on Wall Street.

3. Risk and Human Nature🧍

Bernstein reminds readers that although mathematical models are powerful, human greed, fear, and irrationality often transcend theories.

👉 The editor feels that the Hong Kong financial market is the most relevant. Many retail investors trade stocks with a lot of theoretical knowledge, but ultimately lose money because of their poor mindset.

🏛️ Theme 4: Risk Philosophy and Social Significance

Bernstein's lectures go beyond finance and explore the philosophy behind risk. He believes that learning to manage risk is tantamount to challenging the authority of God and taking our destiny into our own hands.

👉 My understanding: Starting a business, investing, and even immigrating to Hong Kong are all risky decisions. Knowing how to analyze risk means knowing how to take control of your life.

🌟 Editor's summary

"Against the Gods" is not a pure financial textbook, but an epic of risk management .

• Want to know how risk management went from religion to mathematics? 📜
• Want to know the stories behind portfolio theory and insurance systems? 📊
• Want to learn how to face uncertainty rationally? 🧠

👉 Editor's summary: This book teaches us that risk is not an enemy, but a force that can be controlled.

📑Against the Gods Hong Kong Version App Pack I've compiled a guide for everyone who wants to "land in Hong Kong." Read it and you'll instantly understand the risk wisdom contained in the guide. 🌍 Hong Kong people's daily life vs. risks Stock trading📈: The Hang Seng Index can fluctuate greatly within a day, and reflexivity and market sentiment are fully utilized. Buying a house: The rise and fall of housing prices are often not rational, but are determined by public psychology and supply expectations. Insurance: Hong Kong people love to buy medical/critical illness insurance, and the "law of large numbers" behind it helps you share the risk. Immigration ✈️: It is one of the biggest risk decisions in life, involving multiple uncertainties such as economy, family, and culture. 🧠 Applying the wisdom points in the book Probability Theory → Stock Trading The book discusses probability calculations, which Hong Kong retail investors can use to understand "win rate" rather than "luck" when trading stocks. Editor’s tip: Don’t assume you’ll win just because you won once; long-term success is the key. Law of Large Numbers → Insurance and Financial Management Insurance companies make money by following the law of large numbers, while Hong Kong people buy insurance to protect themselves by taking on “group risk”. Editor’s perspective: You may not necessarily get sick, but statistically speaking, some people will definitely get sick. Insurance is about buying peace of mind. Portfolio Theory → Hong Kong Asset Allocation Markowitz theory states that diversification of investments can reduce risk. The editor recommends: Hong Kong people should not just "all in" buying properties or speculating in Hong Kong stocks. They can diversify their investments into overseas funds, gold, and even ETFs. Human weakness → Real estate frenzy The book reminds you: Mathematical models cannot defeat human greed. The Hong Kong property market is the best example. People don't bother to calculate and simply chase high prices because they are "afraid of not being able to buy." 🏛️ Social level Government policy: The Hong Kong Monetary Authority's management of the exchange rate is actually the highest level of risk management. Business operations: Hong Kong SMEs face rental, exchange rate and global market fluctuations, all of which are risky decisions. Personal life: Choosing to stay in Hong Kong or immigrate, to work or start a business, is actually a life game of "risk vs. reward". 🌟 Editor's summary The application of "Against the Gods" in Hong Kong can be understood as follows: Stock trading: Use probabilistic thinking and don’t gamble with your life. Buying a property: Understand human nature and don’t blindly follow trends. Insurance: Using statistics to buy protection. Life choices: Risks always exist, but knowledge management can help you "challenge the gods". 👉 Editor's note: Hong Kong people live with risks every day. "Against the Gods" is a survival manual that teaches you how to coexist with risks.