Best Case and Worst Case

  • The value added by a portfolio manager comes from reducing risk at a given return, rather than achieving higher returns at a given risk
  • The ability to intelligently bear risk for profit can be demonstrated through a record of repeated success over a long period of time
  • It’s important to be prepared for once-in-a-generation events, but it’s not necessary to prepare for the worst case scenario
  • Risk control is the best route to loss avoidance, but risk avoidance may lead to return avoidance as well

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