How Many of Us Really Understand Risk?

Sent to you by Nilesh via Google Reader:

How Many of Us Really Understand Risk?

via SeekingAlpha.com: Home Page by Roger Nusbaum on 6/6/11

Roger Nusbaum submits:

Institutional Investor excerpted a little from Howard Marks from Oaktree Capital Management’s piece about risk. The article covers just about every aspect of risk and provides a little validation for some of the ideas I write about. The article is a must-read.

Instead of dissecting the article, I’ll just add a couple of thoughts. The excerpt devotes very little to how people take their perception of risk and then mismanage it. Someone left a comment on a post of mine at Seeking Alpha that he has 40% in closed-end funds. I don’t know if closed-end funds are new for this person or not, but every few years there is the right type of negative event in the market that generally crushes closed-end funds, unjustifiably so. A 40% weighting is a crushing waiting to happen.

Invariably, while things are going well, like now (on a price basis, things have been going

Complete Story »

Things you can do from here:

1. Subscribe to SeekingAlpha.com: Home Page using Google Reader

2. Get started using Google Reader to easily keep up with all your favorite sites