A Book with Legs Amar Bhide - Uncertainty and Enterprise: Venturing Beyond the Known
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Apr 21, 2025 AI Snips
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Knight's Risk vs. Uncertainty
- Frank Knight distinguished risk as measurable and uncertainty as unmeasurable, making uncertainty central to true profit.
- Profit arises from taking on genuine unquantifiable uncertainty, unlike returns from calculable risk.
Narrative Powers Human Judgments
- Human judgment involves imagination and narrative to communicate imagined futures beyond statistical proof.
- Practical decisions rely heavily on language, stories, and metaphors rather than mathematics or statistics alone.
Diversify to Manage Uncertainty
- Diversify investments to prudently manage uncertainty and reduce surprise.
- Gathering extensive information lowers the likelihood of unexpected outcomes.