Peter L. Bernstein, 90

Obituary: Peter L. Bernstein; Influential Economic Historian

By David Wilson
Bloomberg News
Tuesday, June 9, 2009

Peter L. Bernstein, 90, an economic consultant and historian whose prolific writing bridged academic theory and practice in the financial world, died of pneumonia June 5 at a hospital in New York.

Since 1973, Mr. Bernstein had run his New York-based consulting firm and produced Economics & Portfolio Strategy, a twice-monthly newsletter. The publication's readers own or manage more than $5 trillion, according to the firm's Web site.

He wrote 10 books on economics and finance, including "Capital Ideas: The Improbable Origins of Modern Wall Street" (1991), which is considered a landmark work on modern investment theory and practices.

"In Wall Street's herd of narrow and twitchy minds, he is patient wisdom personified," Money magazine wrote about Mr. Bernstein in 2004. "Over the vast sweep of his long career, he has probably learned more about more aspects of investing than anyone else alive."

Mr. Bernstein brought an investor's perspective to his writing. Before starting his firm, Peter L. Bernstein Inc., he spent 16 years working at Bernstein-Macauley, an investment company co-founded by his father. He also worked as chief investment strategist at Cogan, Berlind, Weill & Levitt, whose principals included future Citigroup chief executive Sanford Weill.

"The biggest mistakes I made were after I was right," he once said in an interview when asked about his investing. "I overstayed positions," which means he held on to securities too long.

Peter Lewyn Bernstein was born in Manhattan on Jan. 22, 1919. At Harvard University, he majored in political science before switching to economics. He received a bachelor's degree, magna cum laude, in 1940 and was elected to the Phi Beta Kappa academic honor society.

After graduation, he joined the Federal Reserve Bank of New York as a research assistant to John Williams, who had taught him at Harvard. Mr. Bernstein served in the Air Force during World War II, reaching the rank of captain. He was stationed in London, where he gathered intelligence on Europe's economy.

He joined Bernstein-Macaulay in 1951 and became chief executive officer after his father died. He sold the investment company to Weill's firm, then known as Carter, Berlind & Weill Inc., in 1967 and stayed there until he struck out on his own.

By the time Mr. Bernstein began his consulting firm, he had written three books on economics and finance. The first was "The Price of Prosperity," published in 1962. "A Primer on Money, Banking and Gold" followed in 1965 and "Economist on Wall Street" in 1970.

In 1974, he founded the Journal of Portfolio Management, a monthly digest of scholarly articles on institutional investing. He was the first editor of the journal and later served as a consulting editor.

His best-known work, "Capital Ideas," outlined the development of theories on risk, returns and valuation and explained how they were put into practice. Seven years later, "Against the Gods: The Remarkable Story of Risk" recounted the history of efforts to manage risk, starting in ancient Greece.

Mr. Bernstein returned to the subject of gold with "The Power of Gold: The History of an Obsession" (2001) before coming out with "Capital Ideas Evolving" in 2007, which showed how money managers built on concepts he wrote about in his seminal work 16 years earlier.

In between those two books, he took a detour into U.S. history. "Wedding of the Waters: The Erie Canal and the Making of a Great Nation," published in 2005, showed how the building of the canal played a key role in the country's development.

Mr. Bernstein co-wrote two books about U.S. government finance with Robert L. Heilbroner, a classmate at Harvard, who died in 2005, and he edited or co-edited five others.

His first wife, Shirley Dowd Bernstein, died in 1971.

Survivors include his wife, the former Barbara Soskin, who was also his business partner; a grandson; and three great-grandchildren.


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