
https://abs.twimg.com/emoji/v2/... draggable="false" alt="❇️" title="Glanz" aria-label="Emoji: Glanz">How we Misunderstood Risk?
12 points to understand Risk and take better decisions.
A thread

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🧵" title="Thread" aria-label="Emoji: Thread">

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">Most people are confused about risk should we take it,avoid it,should we manage or quantify it.
What is risk? Why it is important to to understand its implications.
Lets dive in
1/12

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger"> I define risk as our probability of getting harmed financially, emotionally or physically due to life uncertainty/ randomness.
Its also our inability to meet our desired outcomes
2/12

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">Since human beings are not good at predicting or anticipating things our fear of unknown is what makes us avoid Risk.

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">Risk involves a certain degree of danger but our Anti-fragility towards it makes us stronger every time we deal with it.
3/12
3 Ways of dealing with Risk

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">Calculated risk -Earns constant or mediocre returns.

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">Risk averse-when people don&
#39;t like to take risks and they&
#39;re afraid of it.

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">Asymmetric risk-it&
#39;s a huge risk with potentially high downside or upside these are non-consensus decisions.
4/12

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">People who take calculated risks like day traders and investors can make a living and & earn average returns than people who are Risk Averse.
5/12

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">Risk averse people generally tend to live their life in stagnation.
They don&
#39;t want to take any type of risk but they forget that risk is inherent part of their lives.
6/12

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">Risk is the inherent nature of universe every move we make every action we take have some type of risk involved in it and it&
#39;s all predicated on our inability to predict future.
7/12

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">People who take asymmetric risk open up a small window of opportunity to make exorbitant returns and might become next billionaires but it has a downside of complete ruin .
Those who take this type of risk can to go bankrupt too.
8/12
How to deal with the risk pointers ?

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">Understand yourself

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">Have clear goals

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">Quantify your risk

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">Have exit rules and stop losses

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">Never risked more than you have
Debts are riskier for this reason
9/12

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">The best thing about future is its cant be predicted but it can be planned.

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">Planning with risk management is somehow similar to predicting the future.
10/12

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">Risk and Volatility are two different concepts.

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">An asset can be risky but not volatile & a volatile asset can be less risky, do not confuse both.

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">Volatility is a short-term phenomena and growth is a long-term.
11/12

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">A growth of an asset depends on its long term fundamentals but volatility is driven by greed and short-term horizon of people.

https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔰" title="Japanisches Symbol für Anfänger" aria-label="Emoji: Japanisches Symbol für Anfänger">If you like this thread

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12/12
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