Investing consists of exactly one thing: dealing with the future. And because none of us can know the future with certainty, risk is inescapable.
The first step consists of understanding it. The second step is recognizing when it’s high. The critical final step is controlling it. Because the issue is so complex and so important, I devote three chapters to examining risk in depth.
people are naturally risk- averse, meaning they’d rather take less risk than more.
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Great investing requires both generating returns and controlling risk. And recognizing risk is an absolute prerequisite for controlling it.Risk means uncertainty about which outcome will occur and about the possibility of loss when the unfavorable ones do. The next important step is to describe t...
Often the most difficult step, because it's easy to focus on the wrong part of the problem, or look at the problem too broadly.
The first thing you need to do is reduce it to its simplest and purest form so you know exactly what you're dealing with. While you're doing this, you need ...
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