Sublime
An inspiration engine for ideas
Risk is the price of a return. Risk is a measure of probability, the likelihood of gaining or losing money. There is no investment without risk, so be sure the potential return justifies the level of risk.
Scott Galloway • The Algebra of Wealth: A Simple Formula for Success
on investment, margin of safety, and upside potential.
Walker Deibel • Buy Then Build: How Acquisition Entrepreneurs Outsmart the Startup Game
The problem with small positions, such as a 1 percent position, is that if you're right and the asset goes up 100 percent the portfolio only goes up by 1 percent. There's no point in taking that risk for a 1 percent increase. At the same time, if you make an Aggressive investment worth more than 10 percent of your holdings, you could lose 10
... See moreThomas J. Anderson • The Value of Debt in Building Wealth
Nassim Taleb, author and researcher, sums it up in this graph:
Steven Bartlett • The Diary of a CEO: The 33 Laws of Business and Life
Once an investment is made, the rough outcomes (averaged from several independent studies of angel returns) are: 50 percent eventually fail completely. 20 percent eventually return the original investment. 20 percent return a profit of 2 to 3 times the investment. 9 percent return a profit of 10 times the investment. 1 percent return a profit of
... See moreDavid S. Rose • Angel Investing: The Gust Guide to Making Money and Having Fun Investing in Startups
Hiring an employee, like offering a bet, is not a riskless choice. Betting on hiring the wrong person can have a huge cost (as the CEO who fired his president can attest). Recruitment costs can be substantial, and every job offer has an associated opportunity cost. This is the only person you can offer this opportunity. You might have dodged the
... See moreAnnie Duke • Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts
Therefore, investments allocated to the personal risk bucket will be selected to limit the loss of wealth but will probably yield below-market returns. Allocations to the market risk bucket will provide risk-adjusted market returns, in accordance with the diversification principles of modern portfolio theory. Finally, allocations to the
... See moreAshvin B. Chhabra • The Aspirational Investor
Tail-end risk is everything.
I don’t know if Brendan and Bryan’s death actually affected how I invest. But it opened my eyes to the idea that there are three distinct sides of risk:
The odds you will get hit.
The average consequences of getting hit.
The tail-end consequences of getting hit.
The first two are easy to grasp. It’s the third that’s
... See more