Volatility and Investment: The phenomenon where an asset’s price fluctuates over time is called volatility. Owning and reselling this volatile asset is known as an investment. The concept of buying and reselling an asset often causes us to overlook the fact that this process involves a trade-off between low-volatility and high-volatility assets. Cash is less volatile than stocks, and stocks are relatively more volatile. In other words, investing involves exchanging low-volatility assets for high-volatility assets and then switching back to low-volatility assets. Meanwhile, surplus profit is generated by the price differences caused by volatility. What would happen if we traded only highly volatile assets with each other? We would probably hesitate to exchange assets and might refrain from investing. In investing, there must be both low-volatility and high-volatility assets. - Joseph’s “just my thoughts”
Humans can explain why they consciously act, but it’s hard to clarify their unconscious actions . When we can’t explain our unconscious behaviors, we often feel a sense of fear. We perform many actions unconsciously without realizing it, but if we can’t explain why, our brains invent their own stories . Humans are naturally drawn to and affected by stories. Fear arises when we’re in a situation that can’t be explained by our stories. - Joseph’s “just my thoughts”