Risk is highest when everything seems perfect.
Do you feel safe, successful, relaxed, clever?
What systems are you trusting?
What assumptions are taking for granted?
The conditions that create prosperous outcomes often plant the seeds of their own unwindings.
Risk happens fast.
- Ask a turkey how it thinks its life is progressing 1 day before slaughter. Never better...
Boring is often a feature, not a flaw.
Leaving money on the table isn't a bad thing if it provides a margin for error.
This is the same as point 4 but its so important to stress this.
You must leave a margin for error. You must leave money on the table.
There is never one single catalyst to any existential risk.
The biggest risks, by their very nature, can’t be forecasted.
- The next crisis wont look like a past crisis.
When you have already achieved “success,” no terminal tail risk is worth it, regardless of the probability.
Regardless of the probability, don't risk upside that you can't afford to lose. Lock it in, cash out, leave money on the table. See points 4 and 5.
Warren Buffett once said, “It’s insane to risk what you have and need for something you don’t really need.”
If the downside risk is acceptable, then you can take big risks. If the downside risk is not OK, take smaller risks.
For example, if you're investing €100 and it wont ruin your life if you lose it then you can take a big risk. But if you've turned that €100 into €100,000 and you're financial security is much improved, then don't take big risks. You have much more to lose and much less to gain.
The biggest risks always look obvious in hindsight, yet we never catch them beforehand.
You will be blind to your blindness, you cannot know what you don't know. But you can work hard and take rest.
You can do diligent research and take time to reflect. If you know your thoughts and actions aren't clouded by fear or greed, and you were not compelled to make a rushed decision, then accept that you did your best.