Surviving stock market risk/reward | John Mangun

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I have always assumed that the only place to find “life” is on planet earth. I believe this because from the simplest single cell bacterium to the epitome of complex life forms (humans) staying alive is a lot of work. Know more:

I have always assumed that the only place to find “life” is on planet earth. I believe this because from the simplest single cell bacterium to the epitome of complex life forms staying alive is a lot of work. Survival is a constant, never-ending battle and eventually everything loses the war against becoming individually extinct. Why bother?

Therefore, our quest is to find the optimal risk-reward balance, a delicate act of weighing these two critical components. We must somehow measure the odds of “winning” against losing and then, is the reward beneficial enough to offset the pain of losing? Does buying a 6/45 lotto ticket with that eight million jackpot make sense on the Risk/Reward equation? No because your odds of winning are much worse than the possible reward if you do win.

 

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