Zero-risk bias
Decision makers tend to prefer the sure thing over the gamble (they are risk averse) when the outcomes are good. They tend to reject the sure thing and accept the gamble (they are risk seeking) when both outcomes are negative.
Daniel Kahneman • Thinking, Fast and Slow
Risk Management - Small Losses vs. Catastrophic Risk
Retail is too averse to small risks and leave themselves open to catastrophic risks... [Professionals] don’t think of losing a million dollars in a day as a risk. That’s just what happens if you’re tossing a coin.
Retail is too averse to small risks and leave themselves open to catastrophic risks... [Professionals] don’t think of losing a million dollars in a day as a risk. That’s just what happens if you’re tossing a coin.
"trader" is a uselessly broad term
No wonder people hunker down and avoid committing. The macro risk is gone; nobody is seriously worried about global nuclear conflagration. [1] We’re worried about comparatively micro risks, though: financial instability; the grinding risk of having more debt and fewer assets than the previous generations; the fear of relentless social atomization —... See more