Risk and Return

You don’t get paid for taking risk. The idea that you can simplify risk into a single number is wrong. This means you can’t simply choose a higher return because you have a higher risk tolerance. You can get return-free risk more easily than risk-free return. The best you can do with risk is manage it. Through mitigation, avoidance, transfer, or acceptance. In the long run, the return follows the fundamentals. What is being done? What is being made? What problem is being solved? Is someone willing to pay for it, and can you create a container through which you can charge? The world is complicated, ambiguous, and random. The best we can do is build endurance and resilience. Then do something valuable.

Volatility isn't Risk, Smooth isn't Safe