Warren Buffet wrote: "You have to be fearful when others are greedy and be greedy when others are fearful". Warren was referring to the "ideal" strategy to adopt when dealing with the stock market. The old adage "where there is a will, there is a way" can be rechristened to reflect the new-age saying "where there is risk, there is a reward". It's definitely not Boolean as in there is guaranteed reward when risk is present, or vice-versa. All it does is increase the possibility that one might be more successful when taking risks, than when compared to not taking risks at all. Risk and Reward are two words that have always gone well together - like peanut butter and jelly in some ways because one is sweet and the other salty! The culinary experts advocate a pinch of salt in the most sweetest of desserts to give it a nice twinge - maybe they need to be told the reference to risk and reward!!
Back to mainline, I read an excellent article on 'risk and reward' in the weekend Financial Post newspaper (yes a physical paper on hand, which is fast becoming oblivious!) that could be best summarized by one line that the author beautifully put in, to describe risk taking. Here is my attempt at quoting the article (not verbatim): "Risk taking is by no means consistent as it extends across avenues. A person who is an extremely careful driver on the streets could be the most carefree when he is in a casino. On the other hand, someone who is extremely careful and avoids risk taking in his financial aspect of life could be the most reckless when on the streets."
The essence of what the author's statement meant, or rather what yours truly interpreted it to be, is simple - risk appetite is not just unique to individuals but also unique to areas of life the very same individuals choose to apply it to. You cannot, by any stretch of imagination, choose to be consistent in risk taking. Neither is anyone's appetite to risk taking consistent across all walks of life. I was curious, when I read this article, as to the link between one's risk appetite and their general personality. Interestingly enough, there is a whole scientific community that has delved into this aspect. I for one have been risk averse all the way to one end of the pendulum, and I believe part of it comes with the territory and the culture - the role one's upbringing plays in determining the intangible aspects of decision making in life couldn't be more apparent than risk appetite for example.
What's your risk appetite? Have you seen rewards commensurate with it?
Sunday, April 12, 2009
Saturday, April 4, 2009
Election democracy: For the vote, By the poll, to the people
“Prediction, especially about the future, is quite hard” said the famous physicist Niels Bohr.
I am not sure if he referred to the kind of predictions the astrologers ilk make. Maybe he was referring to providing an insight into what tomorrow has in store for us in terms of advancements in science and technology, or just its general impact on day to day events. When people form opinions on events after they have taken place, there is always a tag attached – it is the oft used phrase in such circumstances: “in hindsight”. Opinions in hindsight have the benefit of repeatedly analyzing the event that just happened, from various angles, and then putting forth an opinion that is based on logic which therefore can be explained away. Future events or predictions are just that – mere hypotheses about what is likely; maybe the odds are improved depending on the probability of certain events happening more than the other, or some sequence of events from the past guiding the future event in a specific direction.
Putting all the jargon around probability and its basis on prediction aside, for a moment, I am wondering how much attention the exit polls (that various news love to put out around elections) are getting. Would these exit polls or predictions, as to the results of the elections, end up biasing the common man that is the voter? The media is looking for an avenue to analyze and even over-analyze at times, each and every aspect of a particular event. The polls and the drama surrounding the predictions provides more than enough fodder for the media to have a field day around all the data that is thrown up. Whether there is any worthwhile benefit to these polls is beyond my mere comprehension.
It is amazing to note that without any data or useful inputs, there is nothing to debate upon. Where there is a plethora of data, the analysis surrounding the combinations of the very same data isn’t too far behind. This is applicable to every single aspect of our lives – if we take a moment to look at our everyday life, every logical action of ours is based upon weighing pros and cons, or in other words a very analytical approach to analyzing data. So, in my opinion, the poll predictions are just that – a bunch of data that overzealous political analysts love to debate on live television in the fervor that everyday lives depend on it. It would be that much more beneficial to the common voter if these esteemed political analysts would instead pick up and analyze the past performance (yes, a performance review) of each and every meaningful politician that is worth his / her salt – this would at least help the voter make a judicious decision rather than be biased by the opinions of polls that already determine the winner or loser before the first vote is even cast.
I am not sure if he referred to the kind of predictions the astrologers ilk make. Maybe he was referring to providing an insight into what tomorrow has in store for us in terms of advancements in science and technology, or just its general impact on day to day events. When people form opinions on events after they have taken place, there is always a tag attached – it is the oft used phrase in such circumstances: “in hindsight”. Opinions in hindsight have the benefit of repeatedly analyzing the event that just happened, from various angles, and then putting forth an opinion that is based on logic which therefore can be explained away. Future events or predictions are just that – mere hypotheses about what is likely; maybe the odds are improved depending on the probability of certain events happening more than the other, or some sequence of events from the past guiding the future event in a specific direction.
Putting all the jargon around probability and its basis on prediction aside, for a moment, I am wondering how much attention the exit polls (that various news love to put out around elections) are getting. Would these exit polls or predictions, as to the results of the elections, end up biasing the common man that is the voter? The media is looking for an avenue to analyze and even over-analyze at times, each and every aspect of a particular event. The polls and the drama surrounding the predictions provides more than enough fodder for the media to have a field day around all the data that is thrown up. Whether there is any worthwhile benefit to these polls is beyond my mere comprehension.
It is amazing to note that without any data or useful inputs, there is nothing to debate upon. Where there is a plethora of data, the analysis surrounding the combinations of the very same data isn’t too far behind. This is applicable to every single aspect of our lives – if we take a moment to look at our everyday life, every logical action of ours is based upon weighing pros and cons, or in other words a very analytical approach to analyzing data. So, in my opinion, the poll predictions are just that – a bunch of data that overzealous political analysts love to debate on live television in the fervor that everyday lives depend on it. It would be that much more beneficial to the common voter if these esteemed political analysts would instead pick up and analyze the past performance (yes, a performance review) of each and every meaningful politician that is worth his / her salt – this would at least help the voter make a judicious decision rather than be biased by the opinions of polls that already determine the winner or loser before the first vote is even cast.
Subscribe to:
Posts (Atom)
Posts
