The history of mathematics as it applies to the probabilities and the stock market is of course one of the most fascinating subjects around. The book "Against the Gods: The Remarkable Story of Risk" covers it in great detail. A fascinating read, Peter L. Bernstein reviews the beginning of recorded history of "possible outcomes," to how the idea "evolved" into the current system of statistics and probability theory.
One of my favorite topics is the middle ages when insurance companies started to issue life insurance. Originally, companies would charge the same amount for a life insurance policy no matter the age or health of the individual, as the concept of "likelihood of death" was an evolving concept. They had no term for evaluating risk of death!!!!
Even more cool is the the way that he explains the history of the Gaussian (Bell) curve that we so admire. I was amazed to learn how much of the mathematics of probability was NOT invented by mathematicians, or even physicist or astronomy types. It was evolutionary biologists! Imagine that! I was shocked to say the least. I never realized how much mathematics was developed by the likes of Galton, Darwin, Mendel and his peas, and other tree huggers.
The last part covers modern game theory and other "recent" developments, such as efficient market theory and the Sharpe Ratio. Absolutely fascinating. A must read if you are into the history of statistics.
Unfortunately, no part of the book identifies any particular strategy for investing. No bets today.
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