(continued)
After risking a peek at such risky matters, let’s now rid ourselves of risk. And we can do better than a freezer stash. We can generally conclude now that stocks that are not profitable, are growing slowly, and haven’t enough money to pay their bills, but have the potential to rectify these matters, are risky […]
(continued)
Let’s get complicated. First though, let’s create a fundamental definition: it’s not the risky aspects of a company that will translate into that which will reward us. In other words, a company’s lack of profitability will never reward us directly. The reward is what happens to a stock’s price, should it lose that which makes […]
(continued)
So let’s do this. We must remember: higher risk does not equal higher reward. Higher risk means there is potential for higher reward at the cost of potential pain. If, in comparison to stock B (which is trading at $10, has no risk, and will reward you nothing above inflation—sound like a Treasury bond?), stock […]
One of the most fundamental things to think about in the investor’s mind is the concept of risk. Interestingly, it can be the biggest thing many of those investors either think about wrong or do not think about enough. So let’s think about this.
Everyone who has followed financial theory directly knows well that teeter-totter […]