A Quote by Jerome Powell
A risk-insensitive leverage ratio can be a useful backstop to risk-based capital requirements. But such a ratio can have perverse incentives if it is the binding capital requirement because it treats relatively safe activities, such as central clearing, as equivalent to the most risky activities.
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We can ill afford to have activities conducted as "non-profit," that is, as activities that devour capital rather than form it, if they can be organized as activities that form capital, as activities that make a profit.
Using volatility as a measure of risk is nuts. Risk to us is 1) the risk of permanent loss of capital, or 2) the risk of inadequate return.
The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital... the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth in the economy.
My whole business philosophy is based on a risk-reward ratio. But it's got to stack up. If it doesn't, don't do it. You might as well go to a casino.
I have been in relatively high-risk businesses all of my adult life. Few of the others, however, had the possibility of direct gains in knowledge which this one had. I have confidence in the equipment, the planning, the training. I suspect that on a risk-gain ratio, this project would compare very, very favorably with those to which I've been accustomed on the past 20 years.
The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital from static to more dynamic situations, the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth of the economy.
We regard using [a stock's] volatility as a measure of risk is nuts. Risk to us is 1) the risk of permanent loss of capital, or 2) the risk of inadequate return. Some great businesses have very volatile returns - for example, See's [a candy company owned by Berkshire] usually loses money in two quarters of each year - and some terrible businesses can have steady results.
Just because a company's future is highly uncertain doesn't mean an investment in it is risky. In fact, some of the best potential investments are highly uncertain but have little risk of permanent capital loss.
I have a perverse attraction to risk. Not physical risk but emotional, financial risk - anything than can't kill you immediately.
Operational risk is the risk of loss resulting from bank operational failures, such as rogue traders, fraudulent sales practices, and cyber risks. Operational risk capital is money or assets that banks have to hold to shield the economy from the consequences of these kinds of failures.
During the period of capital moving from one employment to another, the profits on that to which capital is flowing will be relatively high, but will continue so no longer than till the requisite capital is obtained.
To laugh is to risk appearing a fool. To weep is to risk appearing sentimental. To reach out to another is to risk involvement. To expose feelings is to risk exposing your true self. To place your ideas and dreams before a crowd is to risk their loss. To love is to risk not being loved in return. To hope is to risk pain. To try is to risk failure. But risks must be taken, because the greatest hazard in life is to risk nothing.
to love is to risk, not being loved in return. to hope is to risk pain. to try is to risk failure. but risk must be taken because the greatest hazard in my life is to risk nothing.
The financial crisis was linked to the fact that banks had excessive leverage and too many risky assets. The solution is not to try to dictate to banks what they can do or not do, but to require them to strengthen their capital to absorb potential losses and hold less risky assets.
While the move to central clearing has made the system safer, we need to make sure that the central counterparties have the resources and risk-management practices to withstand plausible but severe shocks.
In my view, the biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital. Not only is the mere drop in stock prices not risk, but it is an opportunity. Where else do you look for cheap stocks?
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