The world of investing is full of uncertainty. Even if we understand the past, we cannot predict the future, and past patterns are not always reliable. To maintain stability and protect my interests in an uncertain world, I need to know my own limits for change. Based on these limits, I should develop small, regular response patterns. In other words, the key to overcoming uncertainty is my own consistency, guided by the thresholds I observe in the world around me. Small, steady behaviors and habits can help manage or minimize the impact of uncertainty. No one invests without expecting the asset’s value to increase over time. The issue is that no one can truly predict the future, and even correct predictions are mostly based on probability and luck. However, from a broader perspective, microscopic risks can be managed. For example, the macro principle “Every human dies” must be 100% true, even if individual behaviors are unpredictable. - Joseph’s “just my thoughts”
Let’s say you have two options. If you press the blue button , you will receive 1 million USD, and if you press the red button , you will receive 10 million USD, but the probability of winning is 50%. Which button would you press? If pressing the blue button is business, pressing the red button is gambling. In other words, depending on your attitude toward the relationship between risk and reward , we can determine whether we are suitable as managers. But if you press the red button with a 50% chance of winning and you don’t win, and you have to pay a fine of 1 million USD, would you still press the red button? The relationship between risk and reward influences people’s behavior. Business is about creating a structure that is advantageous to me, and building a system in which the structure continues to benefit me is called management. - Joseph’s “just my thoughts”