Montier's 7 laws of investing: Risk is not a number
Moneylife Digital Team 30 June 2011

Academics try to quantify risk as a number. Practitioners define it as permanent loss of capital

In finance, risk is typically measured in terms of standard deviation, variance or beta. It is quantified on the basis of the volatility of an asset. But, according to value-investor Benjamin Graham, this concept is wrong—“Real investment risk is measured not by the percent the stock may decline...

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