Very high risk is more accurately linked to faster returns. The actual returns are offset by the cost when the risk is too high, in which the fast returns are met with equally fast losses.
Mersaphe is right however, that without taking any risk, your outcome is guaranteed to correspond to your inactivity, where you passively allow your fate to be determined by outside forces.
mmuurrii
Since you're an investor, consider decisions made on the basis of technical analysis, versus those who rely more on analysis of a company's balance sheets, earnings reports, overhead costs, management, all things that detail how the company is being run, as opposed to some abstract graph that chartists rely on. Also consider how psychology has an effect on stock performances, since we live in a "confidence" economy. Working with charts exclusively is attuned to psychology investing, which I liken to "gambling", even though it's all gambling to varying degrees. It's just that one is more resilient to psychology investing than the other.
Slow investors aren't as worried about day-to-day stuff, because they are more concerned about how the company is run, than how the market is performing. This is similar to what happens at the poker table, when those who "never know what can happen", who then gloat over a single hand, are often fodder for those who base their decisions on long-term profitablility. 2008 was a perceived high-risk, high-reward investment opportunity, because companies who weren't directly attached to mortgage backed securities also suffered due to dropped confidence in the market as a whole.
Buffett's motto, "be greedy when everyone is fearful, and be fearful when everyone is greedy" held up in this instance.
I've avoided jargon as much as possible, and if this isn't"voodoo chicken" enough for you, then I'm afraid I am just incompetent at explaining things.
Wow. The Chess.com community have all used beautiful illustrations and examples to think about. I'm happy with having this explained to me.
Taking risk often means going for sharper lines where a slight inaccuracy will prove fatal. At times it could also mean heading for an imbalance in the position which might be difficult to evaluate, but nevertheless would gives some chances. In the former case, the player who could calculate better will obviously get the upper hand, while the latter calls for the ones with an infinitesimal eye for the potential of the position and filigree in appreciating its fine points.
An uncalculated risk is pinning the tail on the donkey,none of the information but 1.
A calculated risk is all of the information but 1.