I got a copy of Aaron Brown's latest book Red-Blooded Risk, which is kind of like My Life as a Quant by Derman, in that's it's a very personal account of how finance works. I think it's very useful for 50-somethings to write retrospectives like this, because otherwise it's written by people too far removed or too naive. For example Michael Lewis's Liar's Poker is now a classic, but he was a mere bond salesman for 3 years; while his anecdotes were interesting and well-told, his big take-aways on how finance fits with the modern society and the economy were as naive as your typical 25-year old bond salesman.
Brown makes several important points. For example, he notes that the 99% value-at-risk might capture more relevant data, but it needs so much data one should look at 95% value-at-risks. While you can derive this from statistics, it is a practitioner point that clearly is better appreciated from experience. He clearly comes across as someone who understands both the math and how it is applied.
The book tries to deal with how to manage risk, mainly from the point of view of a hedge fund, or something where one is looking at a bunch of strategies. That is, in my experience as a risk manager at KeyCorp, most of our risk there was incidental as a market maker with customer flow, and such risks were rather trivial once one had 'rogue trader' risks under control. His view is more like if you are looking at a book with pairs traders, a momentum trade on government debt, and other such strategies.
Brown mentions early on that he is thinking about risk differently than the standard model, where risk is a cost, and return a benefit. He never really boils it down to something concrete, but rather over the course of the book tries to argue about his view of risk that is qualitatively different. It's kind of like trying to present the meaning of life, not with an aphorism, but rather a bunch of examples. On one hand, this can get you closer to the truth, on the other hand readers can come away confused.
As any professional realizes, however, the gestalt nature of 'risk' limned in this book is the way risk feels to most people--something important and hard to pin down, like meaning and justice--and so Brown's experience is illuminating and should save people a lot of time rediscovering these insights themselves (better to learn via a book than trial-and-error). I'm very sympathetic to the idea that standard risk models are misleading. I prefer a different view myself, and I'm working on a new e-book in that direction, and I too find that risk cannot be concisely described outside of at least several pages of words.
Brown's book is very opinionated and has the feel of a smart guy looking at lots of real situations. I think for big ideas, such as risk, meaning, and justice, it's good to have strong beliefs weakly held. That is, you only learn in these ambiguous domains by taking stands, trying to defend them, learning from the process and adjusting your prior prejudices.
It's a cliche to say risk management is the combination of art and science. You need to know something about history, statistics, and programming to be useful as a risk manager. You also need common sense, and that is best informed by experience, which is greatly abetted by reading insider memoirs like this.