Remembering Peter Bernstein - Finance - CFO.com

Remembering Peter Bernstein - Finance - CFO.com

Remembering Peter Bernstein
When it came to writing the history of finance, he had the Midas touch.
Edward Teach - CFO.com US
June 10, 2009

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Peter L. Bernstein, the well-known economic historian, journal editor, investment manager, and newsletter publisher, died on June 5 at the age of 90. In the Journal of Portfolio Management, which he founded and edited, Bernstein created an important forum for academics and traders to advance sophisticated ideas about finance and risk management.

In popular books like Capital Ideas: The Improbable Origins of Wall Street and Against the Gods: The Remarkable Story of Risk, Bernstein made those ideas available to a wider audience. In 2001, Bernstein spoke with CFO about his then-latest book, The Power of Gold: The History of an Obsession. Here is what we wrote then, followed by our interview with Bernstein.
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The New York Times Peter Bernstein obituary
Peter L. Bernstein has seen many things in the course of a long and varied career, but few have been as spectacular as what he beheld one day in 1940 at the Federal Reserve Bank of New York. Five stories beneath the earth, the massive stainless-steel door to the bank's vaults was opened for the young researcher, as a treat from his boss. Within, gleaming under the electric lights, lay more than 100,000 gold bars, the overseas hoards of many countries. It was, remembers Bernstein, "an unforgettable and chilling sight."
The ability of this precious metal to dazzle and dismay is amply documented in his new book, The Power of Gold. Alchemists tried to change base metals into gold, but as Bernstein shows, gold itself possesses a more sinister power of transmutation: to change from a blessing to a curse. This theme is the master thread of his narrative, a fascinating history of ancient kings and modern statesmen, conquistadores and speculators, a Gilded Age and a Great Depression.

Bernstein is well qualified to tell this complicated, many-stranded story. Dubbed "America's greatest living economic journalist" by the Boston Globe, he has written seven other books on economics and finance. The best known of these are Capital Ideas (1992), on the development and application of modern theories of finance and investing; and Against the Gods (1996), an award-winning history of risk management.

Dubbed "America's greatest living economic journalist" by the Boston Globe, he has written seven other books on economics and finance. The best known are Capital Ideas (1992), on the development and application of modern theories of finance and investing, and Against the Gods (1996), an award-winning history of risk management.

But Bernstein is more than a journalist. For more than 20 years he was a Wall Street money manager, handling institutional and individual portfolios. Since 1973, he has been president of an economic consultancy that serves institutional investors. He was the first editor of the Journal of Portfolio Management, for which he remains a consulting editor, and he is much sought after as a lecturer and commentator.

CFO's Edward Teach talked with Peter Bernstein in 2001, just before the venerable economic and financial historian release his book The Power of Gold. Their chat, with the help of a little alchemy, turned into "A 24-karat Tale," which is featured below.

Still, when the suggestion was made that he write about the history of gold, Bernstein balked. "I immediately rejected the idea—who cares about gold at this moment?" he explained during a recent interview in Bernstein's Manhattan office. But then he remembered how he felt in the 1970s about the so-called gold bugs—those investors who flocked to the metal as the ultimate hedge, driving its price to an all-time high of $850 an ounce in 1980—and he changed his mind.

"When the gold pool was abandoned in 1968 and the central banks let the price go up, it stirred up a very antigovernment sentiment—that governments, as Herbert Hoover said, are not to be trusted," recalls Bernstein. "Having grown up in the 1930s with a strong New Deal orientation, I have always felt that government is basically a force for the good. And the sense that government was something to flee from, to a stateless currency, was repugnant."

Since Bernstein felt so passionately about that, "I thought maybe gold would be worth looking into after all," he says. Judging by the acclaim for The Power of Gold, he was right on the money. That shouldn't surprise anyone. After all, when it comes to writing financial history, Peter Bernstein has the Midas touch.

Read full article: http://www.cfo.com/article.cfm/13811645/c_2984411

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This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.