In this episode of Masters in Business, Barry Ritholtz interviews Bill Bernstein, a neurologist turned investor and author, about his unique career transition and perspectives on markets and investing. Bernstein emphasizes the importance of understanding financial history and psychology alongside mathematics, drawing parallels to Shakespearean insights. They discuss modern portfolio theory, efficient market hypothesis, and the need to prepare for worst-case market scenarios. Bernstein shares influences like Jim Grant and Charles Mackay, and critiques the efficient market hypothesis, advocating for a more conservative portfolio to avoid panic during market downturns. The conversation explores deep versus shallow risk, inflation hedges, and the impact of trade and protectionism on the global economy, referencing Bernstein's book, "The Splendid Exchange." Bernstein also touches on his upcoming book, which delves into the radius of trust and the paradox of religion, recommending books by Robin Dunbar, Joe Henrich, and Nick Harkaway.
