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Fischer Black and the Revolutionary Idea of Finance Hardcover – June 24, 2005


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Product Details

  • Hardcover: 400 pages
  • Publisher: Wiley; 1 edition (June 24, 2005)
  • Language: English
  • ISBN-10: 0471457329
  • ISBN-13: 978-0471457329
  • Product Dimensions: 6.3 x 1.3 x 9.3 inches
  • Shipping Weight: 1.4 pounds
  • Average Customer Review: 4.1 out of 5 stars  See all reviews (22 customer reviews)
  • Amazon Best Sellers Rank: #739,322 in Books (See Top 100 in Books)

Editorial Reviews

From Publishers Weekly

In a 30-year career equally divided between academics (University of Chicago) and Wall Street, Black contributed seminal papers in almost every area of finance and many areas of economics, but few were published in major peer-reviewed journals and many were never published at all. He spent most of his time alone in a room thinking and writing, was uncomfortable in large groups, an undistinguished lecturer and famously eccentric in ways more irritating than amusing or dramatic. All of this gives Barnard economist Mehrling (The Money Interest and the Public Interest) his work cut out for him. He has responded with a book that, beyond providing the facts of Black's life, serves as the best currently available general history of the revolution in finance that took place between 1960 and 1990: the essential ideas and disputes are explained clearly, with a minimum of mathematics and jargon, and the relationships among the leading innovators are explored concisely but in depth. As far as Black goes, Mehrling gives a clear picture of his working life and reveals the strong family ties and close personal friendships of a man often thought to have been emotionless. On the whole, Mehrling's book is essential reading for anyone interested in the development of modern finance or the life of an idiosyncratic creative genius. (July)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

Review

“…excellent…” (getAbstract.com, 7th November 2005)

“a rigorous but rewarding biography” (CFO Europe, October 2005)

“highly readable” (Benefits & Compensation International, October 2005)

"...well-researched...recommended..." (Accounting Technician, September 2005)

"The story of Fischer Black...is remarkable both because of the creativity of the man and because of the revolution he brought to wall Street.… Mehrling's book is fascinating..." (Financial Times, 12th September 2005)

“…recommended as readable to those with the intellectual curiosity to pursue financial theory…” (The Independent, 30 July 2005)

“… a vignette-based business biography that captures the essence of this extraordinary man…engaging and entertaining…” (Credit Control Journal, July 2005)

In a 30-year career equally divided between academics (University of Chicago) and Wall Street, Black contributed seminal papers in almost every area of finance and many areas of economics, but few were published in major peer-reviewed journals and many were never published at all. He spent most of his time alone in a room thinking and writing, was uncomfortable in large groups, an undistinguished lecturer and famously eccentric in ways more irritating than amusing or dramatic. All of this gives Barnard economist Mehrling (The Money Interest and the Public Interest) his work cut out for him. He has responded with a book that, beyond providing the facts of Black's life, serves as the best currently available general history of the revolution in finance that took place between 1960 and 1990: the essential ideas and disputes are explained clearly, with a minimum of mathematics and jargon, and the relationships among the leading innovators are explored concisely but in depth. As far as Black goes, Mehrling gives a clear picture of his working life and reveals the strong family ties and close personal friendships of a man often thought to have been emotionless. On the whole, Mehrling's book is essential reading for anyone interested in the development of modern finance or the life of an idiosyncratic creative genius. (July) (Publishers Weekly, June 6, 2005)

"A fascinating history of things we take for granted in our everyday financial lives." (The New York Times)

"[Fischer Black and the Revolutionary Idea of Finance] does an exceptional job of capturing Black’s spirit and gives an insightful inside account of the academic financial revolution." (Global Association of Risk Professionals magazine)

"Mehrling skillfully interweaves the stories of Black's career, his sometimes-difficult personal life, and his contributions to finance and to economics . . . In telling the story of Black's life, Mehrling casts light on a crucial, underappreciated aspect of the making of our current world."-Science magazine

"Excellent new biography of Fischer Black, one of the great innovators of modern finance theory. . . Mehrling also provides an engaging history of the development of quantitative finance and a solid introduction to some of its central concepts."--Region Focus, Fall 2005

"By unearthing Black's personal story, Mehrling conjures a unique glimpse into the context in which "the Einstein of finance" viewed liquidity, risk, capital, business cycles -- the world's entire economic equilibrium. Once inside the mind of Black, you may never look at the market the same way again." --Trader Monthly magazine

"Besides being a splendid account of the early and great years of the development of Finance as an academic discipline, and a fascinating biography of an extraordinary but difficult genius, this book made me think and reflect more than almost any other book."--Journal of the History of Economic Thought

"...Wit and insight" ( Financial Management, December 2006)


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Customer Reviews

A thoroughly enjoyable and completely interesting read.
An investment book reader
His students loved it, because it turned the class into a vibrant seminar.
Gaetan Lion
Perry Mehrling did a good job at writing this biography.
dbianco

Most Helpful Customer Reviews

119 of 126 people found the following review helpful By Gaetan Lion on August 9, 2005
Format: Hardcover
This is an outstanding book about a finance revolutionary. This biography is as interesting as Sylvia Nazar "A Beautiful Mind" about John Nash, the pioneer of Game Theory.

Fischer Black, the human being was as interesting as Nash. As a young man, he was quite the adventurer and engaged in casual sex and taking LSD. But, after suffering a failed marriage and the death of a close friend he recognized the risk of those activities. Thus, he started to live by the CAPM motto to manage the risk in his own life. He drove safe cars, wearing seatbelts before it was mandatory and adhering to a strict diet (fish and vegetables). He married another two times to finally get it right. During his second marriage, when it was not working out, he would seek female companions by posting personal ads in the local paper. And, he would encourage his wife to do the same! Later, he met his third wife through a dating service.

Fischer Black became famous for what he cared less about: the Black Scholes option model. Options were just a passing interest. He cared more about CAPM developed by Jack Traynor. His lifelong ambition was to apply CAPM to economics.

He failed to leave a legacy in economics. Perry Mehrling explains why. Fischer Black had degrees in physics and mathematics but no formal training in economics. His General Equilibrium theory clashed with both Keynesians and monetarists. While at Chicago, his General Equilibrium theory got no respect from Milton Friedman, the leading monetarist. Later, Paul Samuelson, the leading Keynesian at MIT, treated him just as badly. He could not get his economics papers published. In academia he became recognized as cutting edge in finance, but out of his depth in economics.

Fischer was very much egoless.
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57 of 59 people found the following review helpful By Blakeney Bartlett on October 15, 2005
Format: Hardcover
Fischer Black was my brother. What amazes me about this biography is how accurately Perry has portrayed his personality and habits. I was delighted to discover that he managed to describe the person I knew. Even more surprising is the fact that Perry has done this despite the fact that he never met Fischer. It is a tribute to the remarkable depth of his research.
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10 of 10 people found the following review helpful By Rolf Dobelli HALL OF FAME on November 29, 2005
Format: Hardcover
Author Perry Mehrling's excellent book is not merely a biography of Fischer Black, but also the story of the main threads of economic thought during the late twentieth century. More than that, it is the story of the economics profession, and of the great role that politics and personality plays in the acceptance of ideas. It is astonishing to learn how ruthlessly the profession excluded Black's ideas, although he was one of the most incisive economic and financial thinkers of his time, and it is inspiring to see how relentlessly and quixotically Fischer Black continued to press them. The parts of the book that are generally accessible are also fascinating. Unfortunately, far too little of the volume is accessible to the average business reader. Mehrling does a less than adequate job of explaining the great themes of Black's life and thought to lay readers. He notes the importance of the Capital Asset Pricing Model in Black's philosophy, but his account of the model will leave noneconomists scratching their heads. The same must be said of his account of other economic subjects. While we find that only readers with a fairly deep understanding of economics can reap this book's full harvest, that caveat should not deter the general reader from gleaning.
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5 of 5 people found the following review helpful By Craig L. Howe on July 15, 2007
Format: Hardcover Verified Purchase
Revolutions spring from unlikely sources.

Fischer Black was an unlikely revolutionary. He thought like no one else. While teaching, his colleagues attacked problems with formulas and models. Fischer Black did not. He opted to explore them from as many different angles as he could conceive. Once solved, he generated a formula. Solving problems this way, Black found he avoided formula-dictated thinking ruts.

His teaching style was bizarre. He got bored teaching regurgitated knowledge. In his view regular lectures were a waste of time. He developed an engaging teaching style by asking 50 open-ended questions. Combined with his insistence that students learn the language of finance, this interaction gave air to brilliant minds. Black cherry-picked great ideas. His students loved the vibrant seminars.

Fischer Black became famous for what he cared less about: the Black-Scholes option model. Options were just a passing interest. He cared more about Capital Asset Pricing Model (CAPM) developed by Jack Traynor. He sought to apply it to economics.

He failed to leave a legacy in traditional economics. Fischer Black had degrees in physics and mathematics but no formal training in economics. In academia, he became recognized as forward-thinking in finance, but out of his depth in economics.

Robert Rubin, then the managing partner of Goldman Sachs, said it best when he sold his partners on the idea of hiring the academic Black.

"We will learn from Fischer," he is quoted by the author as saying, "and he will learn from us."

Fischer was egoless. He took rebuttals in stride. Open to change, he was an unapologetic believer in free markets. His unorthodox style sparked a revolution in the business of finance. His innovative thinking drove finance to the forefront of the science of economics.

Perry Mehrling has written a brilliant biography about a brilliant man.
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