From Fixing Brains to Managing Money

(Bloomberg Opinion) -- Before he became a financial theorist, William J. Bernstein was a doctor. He spent the first 25 years of his career working with people with neurological issues and the next 25 years working with people with financial ones.

In this week’s Masters in Business conversation, he explains his pivot: After his first book was published, he received so many inquiries from people who wanted him to manage their money that he started Efficient Frontier Advisors (EFA), a registered investment advisory firm catering to ultrahigh-net-worth investors.

Bernstein earned acclaim for his recognition of the elements that drive investments by approaching finance like a science. He discussed how his doctor peers – who would never so much as treat a cold without reading up on the latest medical literature -- jump into investing as if it was merely a hobby. Instead, Bernstein approached the issues of risking capital in order to achieve a reward from a scientific practitioner’s perspective. 

He is also known for his deeply researched financial history books. He is perhaps best known for “A Splendid Exchange: How Trade Shaped the World.” His current writing project is research into the behavior of the herd -- an exploration of human financial folly, and a modern update to Charles MacKay’s 1841 classic, “Extraordinary Popular Delusions and the Madness of Crowds.” 

He also wrote “The Intelligent Asset Allocator,” “The Four Pillars of Investing,” and “The Investor’s Manifesto,” as well as other financial history works, including “The Birth of Plenty” and “Masters of the Word.” He was the winner of the 2017 James R. Vertin Award from CFA Institute.

His favorite books are here; a transcript of our conversation is here.

You can stream/download the full conversation, including the podcast extras, on iTunesBloombergOvercast and Stitcher. Our earlier podcasts can all be found at iTunesStitcherOvercast and Bloomberg.

Next week, we speak with Luis Maizel, co-founder and senior managing director at LM Capital Group LLC, which manages $4.2 billion.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Barry Ritholtz is a Bloomberg Opinion columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He is the author of “Bailout Nation.”

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