Risk is often misunderstood, not because it is complicated, but because it defies intuition. As Howard Marks explains in his discussion on the character of risk, “risk is counterintuitive” and “risk is perverse.” The way we perceive risk can often be the exact opposite of reality, leading investors, policymakers, and … Read More
Nassim Nicholas Taleb: If An Investor Has A Risk Of Terminal Blowup, The “Potential Returns” Of His Strategy Are Totally Inconsequential
Just been re-reading Nassim Taleb’s book – Antifragile: Things that Gain from Disorder, which includes a great passage on risk and a real-life example of how it applies in investing. Here’s an excerpt from the book: Under path dependence, one can no longer separate growth in the economy from risks of … Read More