Wednesday, July 20, 2011


Some people view risk as something dangerous, they might picture someone in a motorcycle doing a stunt or a skydiver flying off a plane.  Yes, both are risk takers but risk can me manifested in many other forms.  Being stagnant is a form of risk it can be of the worst kind. People who don't go to the doctor or take care of their health also take a big risk.  The patient that knows he has high blood pressure and refuses to change his lifestyle.  The cancer patient that will not get treatment.  The innovator who fails to take his idea to the market or get it patented.  These are all forms of risk and all of them involve taking no action.

In the security business, risk is what gives you the opportunity to make a profit.  The more risk one takes the better reward one should be able to get.  The opportunities to make easy money are out there but it is the risk that holds a lot of people back.  Risk averse individuals won't take on risky investments they prefer to leave their money in a CD or savings account.  Once you become better at investing you find ways of managing risk and protecting yourself from taking on too much of it.  One way to protect yourself is to educate yourself on what can go wrong and how to evade those circumstances and develop an exit plan. 

The "No Dutch Book" assumption states that people won't lay down bets that will certainly result in a loss to them. 

One should not hold back ones life by evading risk or fearing it, unless one is positive that taking that risk will surely result in a loss.

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