A History of the Theory of Investments: My Annotated Bibliography (Wiley Finance)

A History of the Theory of Investments is about ideas -- where they come from, how they evolve, and why they are instrumental in preparing the future for new ideas. Author Mark Rubinstein writes history by rewriting history. In unearthing long-forgotten books and journals, he corrects past oversights to assign credit where credit is due and assembles a remarkable history that is unquestionable in its accuracy and unprecedented in its power.

Exploring key turning points in the development of investment theory, through the critical prism of award-winning investment theory and asset pricing expert Mark Rubinstein, this groundbreaking resource follows the chronological development of investment theory over centuries, exploring the inner workings of great theoretical breakthroughs while pointing out contributions made by often unsung contributors to some of investment's most influential ideas and models.

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All Customer Reviews
Average Customer Review:
0 of 0 people found the following review helpful:

Best history available, 2008-06-05
Business, Economics, and Finance with Matlab, GIS, and Simulation Models

This is the most comprehensive, best researched history of thought in financial economics. It may add two dozen references to my forthcoming book on business valuation; it would have shortened the time I spent researching my book Business Economics and Finance.

I agree with Rubenstein that too many authors blindly put down a recent book they read as an authority, and are ignorant of the real sources. If you are writing a scholarly article on financial economics or investment research, you have no excuse for that after Rubenstein's book.

The only quibble I have is the idiosyncratic nature of the history, which Rubenstein freely acknowledges in the preface. This is really a quibble, though; I find Rubenstein to be pretty fair in looking at past sources. Very knowledgeable readers may differ from time to time with Rubenstein's chronology, as very knowledgeable readers do with all history.

Excellent book.


7 of 8 people found the following review helpful:

A Treasure Trove of Historical Context, 2006-11-24
I'm about halfway through the book and must say that I have been pleasantly surprised. I bought the book as a quick way to present accurate historical context to my students. In my opinion, knowledge does not grow; it evolves. A study of that evolution, with the paths not chosen, is an important step in mastering a discipline. This would be enough for me to recommend the book, but there's much more.

Here's a small sample of the items that I've gleaned so far.

What is the intersection of business math, gambling gmaes, and Pascal's triangle? (The graphic that he uses look suspiciously like a binomial tree....) The shift from insurance products to investments as the driver of the mathematics of finance. What is the Fisher separation theorem (which my students consider to be obvious) and why is it not obvious? The importance of the Ph.D. thesis of John Burr Williams, one of the most important economists of which you've probably never heard. How Ben Graham nearly got the Modigliani-Miller theorem but didn't believe that his conclusion was realistic.

This is just from the first hundred pages. I've already bought about a dozen books to extend my reading and am downloading dozens of articles from JSTOR. Most of us learned investment theory from a textbook. I strongly suggest that you add this book, and its contextual knowledge, to your library.


4 of 41 people found the following review helpful:

Not bad as a bibliography, but so what?, 2006-10-27
A better book for the layman is anything by William Bernstein. As Nobel Prize winner Sharpe says on the cover, this is a "idiosyncratic and eclectic" book--a bibliography that's annotated.

After you have learned a subject, of course it's fun to go through archival historic documents and comment on them. Every discipline does this. But it proves nothing except erudition.

One problem I have with this book is that it doesn't teach you anything you don't already know--and if you don't already know it, you won't learn it from this book.

Also it's too expensive, except by those who wish to put on airs and display it on their bookshelf.

Finally, nearly all the vaunted theories of finance have analogs (and digital equivalents) in applied mathematics used in electrical engineering and physics. You could argue that financial engineering is simply cribbing these fields.

BTW I have not read this book, but have added it to my 'wish list' and eventually will get around to reading it.


10 of 12 people found the following review helpful:

Probably one of the best books I have ever read, 2006-06-12
This is arguably one of the best books that I have read. Almost everything relevant to finance and investments is covered in this book, including a good historical discussion of the theories of investment. In addition, Mark Rubinstein has a very clear and simple writing style that transforms complex concepts into words. The proofs are done in a fashion that most readers can understand, and the sections are divided up in easy to break-up sections. This is definitely a must read for any serious student of finance. All of the seminal work in finance is discussed in this text, and this can be used as a guide to asset pricing, corporate finance, investments, and other finance courses. In fact, I would have used this as a supplement to reading journal articles if it were available in the past.


5 of 8 people found the following review helpful:

Rubinstein has done it agian!, 2006-04-25
This book is excellent; it gives a new insight in the history of discoveries in financial economics like no other book. The book is nicely organized with a very useful "Index of Ideas".

What is the ancient history of Pascal's triangle, that again is an important building block for the Cox-Ross-Rubinstein binomial tree? Who was the first to circulate a paper on how time varying volatility was related to fat tailed distributions? The book has some interesting surprises for most of us, and along this historical path Rubinstein shares detailed wisdom on many financial models.

Espen G. Haug
Author of "The Complete Guide to Option Pricing Formulas"

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