Old Ship Fleet: uncertainty and risk.

Hôm kia

In the old days, buying a trading ship posed risks due to natural disasters. Later on, people could have option to buy lets say a 10% share in a fleet of 10 trading ships. When one ship goes down, it doesn't ruin your "portfolio".

I think the concept about not putting all eggs in one basket fits well into risk taking.

Then you have some investors claim, you put all your eggs into one basket - and guard the basket.

The ship fleet works as a syllogism about uncertainty. Math (probability of disaster on statistical basis). And risk taking.

Eggs in one basket is a syllogism about losing everything. But not uncertainty or risk-taking per se.

-> In competitive spaces, with only few or one winner. With exponential, explosive returns -- diversifying or putting eggs in separate baskets make no sense. "Fortune favors the bald" is a better way to describe it.

but it says nothing about mathematical side of uncertainty or risk taking. Hence the "old ship fleet".

Hôm kia

Ghi chú

in APR (after Trump Tariffs crash). If you wouldnt have sound fundamentals about uncertainty and risk, you rather wait out for safer conditions or wait for more "knowns". Whilst people like Qullamaggie or Dan Zanger claim, this is where the big money is made. You pull calculated risks.

When someone says "risk", You think losing.. or uncertainty.. you think fear. Or at the opposite spectrum, you think greed. So fear or greed. Often, you can figure out how markets gives you at least 50-50 odds in most situations. But taking risk on such odds is not mathematically profitable lmao.

If whole your strategy is around DOW theory or trading upsloping 200dma's. You would miss out on the big money profits.

Hôm kia

Ghi chú

point being. "Uncertainty" or "risk" (fear) can be paralyzing and make you lose a lot money, without sound fundamentals. The fleet of old ships is a syllogism, that gives you better perspective what risk taking should be like.