A Quote by Edward C. Prescott
Random distributions are not good things, because people are risk-averse, and this risk adversely affects their welfare. If you get too much price uncertainty, all kinds of long-term, mutually beneficial contracts can't be entered into.
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Risk is not inherent in an investment; it is always relative to the price paid. Uncertainty is not the same as risk. Indeed, when great uncertainty - such as in the fall of 2008 - drives securities prices to especially low levels, they often become less risky investments.
Risk managers and investment bankers and actually, all kinds of investors took on more risk than they expected. So there was a failure of risk management. There was a failure to recognize how much risk there was in some of these securities that people bought.
I don't think the government should touch art. Governments are risk averse. They encourage risk-averse personalities to be artists.
If you think in terms of major losses, because losses loom much larger than gains - that's a very well-established finding - you tend to be very risk-averse. When you think in terms of wealth, you tend to be much less risk-averse.
The majority of short term trading results are just random. In the long term the money ends up with those that can trade and manage risk.
What caused 2008, in my opinion, is that people just didn't see the risk. These people that took on all this risk didn't think they had it - they thought they hedged it all away. As long as there's a perception of risk, and a culture of looking for risk, it's going to be hard to deflate us.
Wall Street sometimes gets confused between risk and uncertainty, and you can profit handsomely from that confusion. The low-risk, high-uncertainty [situation] gives us our most sought after coin-toss odds. Heads, I win; tails, I don't lose much.
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.
We're in the business not so much of being contrarians deliberately, but rather we like to take perceived risk instead of actual risk. And what I mean by that is that you get paid for taking a risk that people think is risky, you particularly don't get paid for taking actual risk.
People are willing to get short-term gains at the risk of long-term choices.
Some people feel affronted when something they thought to be true doesn't happen. If that's the case, then your sense of risk is much higher, and that leads to risk aversion. You need to be able to be comfortable in uncertainty.
Managing risk is a key variable, frankly, all aspects of life, business is just one of them, and one of the things that most people do in terms of managing risk, that's actually bad thinking, is they think they can manage risk to zero. Everything has some risk to it. You know, you drive your car down the street, a drunk driver may hit you. So what you're doing is you're actually trying to get to an acceptable level of risk.
Publishers are very risk-averse, so they lean towards licenses and sequels. But the fact is that even those are not guaranteed hits. So, if 'playing it safe' does not guarantee hits, they might as well leave it up to the really creative, risk-taking people, because they couldn't do any worse.
Term limits would make Congress bolder, more independent, and less risk-averse.
If we overregulate, over control, impose too many burdens and too much bureaucracy - or if we do it across the board, without taking into account the differences among businesses and their relative impact on society - that could make people risk-averse and dampen the entrepreneurial spirit.
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