Risk is often expressed as a number. It may be labeled standard deviation or volatility. Either way, it essentially measures how widely the return of an investment (or portfolio) is expected to vary from “normal."
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Volatility calculations are only one part of the risk assessment process. Being overly reliant on volatility measures creates massive blind spots. Works until it doesn’t.
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You can't calculate the one risk that matters, risk of blowup. But you can somewhat mitigate this risk by knowing you can't calculate it. What you can't know matters more than what you think you know. (Astrology also works until it doesn't)
End of conversation
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