Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: Daniel Miller who wrote (3233)	2/25/1998 11:43:00 PM
From: Robert Graham	Respond to of 12617

How about the idea that what is a risk to some is not a risk at least in the same way as it is to others. We take risks everyday. Imagine what it must be like driving a car through the downtown streets of a large city, where everyone is in a hurry and they are impatient to get home? You must see those crazy drivers out there: they run red lights, they drive faster than the speed limit weaving in and out between cars on the freeway, and so forth. Wouldn't you say that it would be riskier for someone to drive in this situation when compared to driving on your subdivision street in the middle of the afternoon? Would it be even riskier for someone with no driving experience at all to drive in that busy traffic? You must have seen by now one or two very bad accidents which can result from two cars colliding together. This can be the end result of that risk in driving near cars that are driven by those impulsive and unpredictable drivers. But we all do this every day in our lives. Each of us who drives takes on this risk. As time goes by, we hopefully learn how to drive intelligently by driving defensively. This is because the experienced driver comes to understand what is possible and how these impulsive drivers can behave on the road. They can provide the experienced driver clues by the way they drive on what can happen next. When the experienced driver comes across them, he knows enough to give them room and keep their distance from this driver that is in a hurry on the road. This is one way the risk of driving is managed. The beginning driver does not know enough or have enough experience to understand how to do this for themselves so they cannot manage this risk. But after time goes by, this becomes automatic where they do not have to even spend time to think about it, experienced drivers just know how to protect themselves on the road which makes the risks involved much more manageable. So each driver based in part of experience handles this risk differently, some more successfully than others. Allot of this difference has to do with the driver's knowledge and experience which determines their approach to driving which helps them to make the risk more manageable and the outcome of what happens more predictable in their success in making in home without hitting another car. Consider the approach the beginning driver takes to learning how to drive as the approach of a "speculator" (large risk taker) or as the approach of an "investor". For our purposes here, I will define the difference to be the degree of actual risk that the person takes on in what they do. He can either jump in a car and "see what happens" where his lack of knowledge and experience will place him in harm's way. Or a more intelligent approach can be used where someone that has the experience and knowledge give them a start by showing them how to steer the car, obey the traffic signals, and how to watch out for situations that can lead to accidents (drive defensively). Once this learning process is finished, than all this means is that the risk is manageable enough where they are good enough to learn on their own. Perhaps a person's approach which is determined by their knowledge and experience will have something to do with whether they are "speculators" or "investors" in whatever they try. This will help determine how well the associated risks can be managed. What is a "gamble" to one person can be a highly probable outcome to another when the person knows enough to be able to manage the associated risks. This all starts from understanding themselves, what their goals are, and what their limitations are related to what they are trying to do. The unfortunate part of this is that the inexperienced may not know enough to be able to evaluate themselves in this way. So it is not what the person knows that they know and what they know that they do not know that can cause the real problems. After all, if you know that you do not understand something you can take action. It is what a person does not know they do not understand that can expose them to substantial risks. So this person can be actually an outright "gambler" as far as risktaking is concerned when they actually see themselves as an "investor". Makes sense? Bob Graham