What is RISK ?

1. What is RISK?

2. What is Sweet and What is Terrible

3. Hades lost at Casting Lots

4. Chinese Word for Risk

5. Who was the first risk taker?

6. Parable of the Talents

7. Risk Tolerance

8. What is your risk tolerance? How do you feel about taking risks? Take this short quiz: • Do you put on the car brake when the traffic light turns yellow, or do you step on the gas? If you put on the brake, give yourself one point. If you step on the gas, give yourself three points. • Do you fill the gas tank when the needle reaches halfway, or do you run a few miles on empty? If you fill the tank halfway, give yourself one point. If you run on empty, give yourself three points. • Do you take the long way because it's the way you know, or will you take a shortcut you've never taken before? If you take the long way, give yourself one point. If you'll take the shortcut, give yourself three points. • Do you take the train long distances, or do you prefer to fly? If you take the train, give yourself one point. If you fly, give yourself three points. http://faculty.upj.pitt.edu/gmDick/courses/Seminar/johnMaritn/Financial%20Planning%20101%20Syllabus%20&%20PDFs/How%20to%20Measure%20Your%20Risk%20Tolerance.pdf

9. How to interpret your results • Now, add up your points. The maximum score is 12 points, and the minimum is 4. Most people will fall somewhere in between. Your score reflects your attitude toward risk and indicates your ability to accept or tolerate risk. Those of you with a higher score can accept a relatively great amount of risk and are referred to as risk tolerant. On the other end of the spectrum, those of you who scored low can accept very little risk and are referred to as risk averse. Those of you who scored in the middle are risk neutral or risk indifferent. http://faculty.upj.pitt.edu/gmDick/courses/Seminar/johnMaritn/Financial%20Planning%20101%20Syllabus%20&%20PDFs/How%20to%20Measure%20Your%20Risk%20Tolerance.pdf

10. Risk and Utility Theory

11. The Two Bernsteins • William J. Bernstein – The Birth of Plenty

12. The Two Bernsteins Modern Economic Growth Depends on: • Rule of Law and Property Rights • Efficient Capital Markets • Science and Technology • Rapid Transportation and Communication Systems

13. The Two Bernsteins • Peter L. Bernstein – Against the Gods

14. The Two Bernsteins • Our ability to manage RISK separates the modern world from the ancient world. • How do these four factors relate to RISK? • Rule of Law and Property Rights • Efficient Capital Markets • Science and Technology • Rapid Transportation and Communication Systems

15. The Violence Problem

16. Politics and Risk • Tribal Politics • Communism • Modern Democracy/Markets

17. Tribal Politics

18. Communism

19. Modern Democracy/Markets

20. Risk vs. Uncertainty

21. Fat Tail Problem

22. LTCM

23. Nassim Nicholas Taleb

24. Black Swans