A Book with Legs

Amar Bhide - Uncertainty and Enterprise: Venturing Beyond the Known

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Apr 21, 2025
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INSIGHT

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.
INSIGHT

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.
ADVICE

Diversify to Manage Uncertainty

  • Diversify investments to prudently manage uncertainty and reduce surprise.
  • Gathering extensive information lowers the likelihood of unexpected outcomes.
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