Archives Aug. 28, 2014

How Warren Buffett Defines Risk

Last update on Aug. 28, 2014.

 Risk

 

Risk comes from not knowing what you're doing. - Warren Buffett

 

If you mention Buffett's quote above to most people, you'll likely get a nod that says "oooh, that's deep". But if you ask them what they think it means, you will likely get confused stares.

In this article, I will explain what Buffett means when he says risk comes from ignorance. In fact, this quote reveals the way we see risk, and how he sees it differently from how many other people see risk.

 

Shortcomings Of The Traditional Measure Of Risk

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