Comment 

Risk taking

ThompsonS

Risk taking

In his newly released book, The Most Important Thing, chairman of Oaktree Capital Management Howard Marks notes: "In bull markets - usually when things have been going well for a while - people tend to say 'risk is my friend. The more risk I take, the greater my return will be. I'd like more risk, please'. The truth is, risk tolerance is antithetical to successful investing. When people aren't afraid of risk, they'll accept risk without being compensated for doing so...and risk compensation will disappear. But only when investors are sufficiently risk-averse will markets offer adequate risk premiums."

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