Outstanding investors, in my opinion, are distinguished at least as much for their ability to control risk as they are for generating return.
What ever few awards are presented for risk control, they’re never given out in good times. Th e reason is that risk is covert, invisible. Risk— the possibility of loss— is not observable. What is observable is loss, and loss generally happens only when risk collides with negative events.
Germs cause illness, but germs themselves are not illness. We might say illness is what results when germs take hold.
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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...
We all fall prey to unforeseen risks, and are blind to them due to three reasons:
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