Falkenblog makes the case that the pain of taking risk is unrewarded in life, that risk taking is some kind of evolutionary inadaptation, unsuited for investors. Not only that, but positively harmful.
I put this idea in the context of the passionate debates we used to maintain in the ken (Zionist Youth Club) in Buenos Aires, if an artist, in order to create, has to suffer. We agreed that it was rather improbable that a happy, well fed, comfortable, non-neurotic artist - writer, painter, etc. - could produce something that would touch us deep in the soul. The artist had to be suffering, bleeding, feeling more deeply than the common run of humanity.
Later I grew out of this idea, and find no connection between the pain felt by the artist and the quality of his art. Now Falken is saying that also risk is useless. We may conclude that there is no justice on this Earth. Pic. Frida Kahlo.
2 comments:
Smart guys never take risk with their own money - only with other people's money. If the bet pays off, then you "share" the winnings with the people who gave you their capital to risk. If it doesn't, too bad. You have collected commissions, bonuses, etc. in the meantime.
Nowadays, at least in the US, the alternative is to put your money in "safe" investments that pay a negative rate of return after inflation. So either way the little guy loses. The game is rigged.
K
"... find no connection between the pain felt by the artist and the quality of his art." Danielle Steele's 1998 non-fiction account "His Bright Light" of the life and suicide of her son with bipolar depression strikes me as worth reading (but not her novels). My guess is that in literature (but perhaps less so in music and the visual arts) personal experience and emotional suffering do (or can) create artistic depth. According to Buffett, if you know what you are doing, taking more risk than your less-knowledgeable competitors often does pay off.
K has a good point. The smartest operators are knowledgeable like Buffett and also play with other people's money. However, Wall Street is overrun with not-overly-knowledgeable and not-overly-honest operators who are good at hoodwinking people.
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