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Patrick OShaughnessy@patrick_oshag

John Kim on how we misprice risk: "No one actually invests with a lot of risk. There are only people who perceive there's no risk. People convince themselves that the risk is far less than what it really is so they can receive the reward. If somebody says, "I'm risk-loving." No you're not. You're just really good at rationalizing away the risk. If you know your outcome is gigantic, you just have to rationalize the risk to half of what it really is, and you'll say yes. That's where a lot of cognitive mistakes are made in investing."