Humans are typically terrible at understanding risk. I've had a lucky path to learn a bit more about it than many, training and competing in high-risk sports -

Humans are typically terrible at understanding risk. I've had a lucky path to learn a bit more about it than many, training and competing in high-risk sports - downhill ski racing, rock climbing, and sportscar racing. Among those groups, it is almost axiomatic to understand and chat about "smart crazy" vs. "dumb crazy" - everyone knew immediately what we meant, but no one really defined it. The best definition I heard was from an auto racing coach with a military background (another high-risk venture). He put it as: The difference between using knowledge, technology, and skill to manage risk vs getting away with something. We can use knowledge, tech, & skill to have entire careers in situations that will kill us in an instant, e.g., high-rise construction, steelmaking (after safety became a goal), deep sea diving, flying, etc.. Of course, there are many stunts that will kill you but not every time -and people get away with them all the time, until they don't, e.g., drunk driving, gambling. These are all essentially forms of Russian Roulette. And yes, sometimes knowledge, tech, & skill aren't enough, and you must just go ahead and yell "never tell me the odds". Knowing this early has definitely helped in life, but I'm not sure it has made me a good investor. I'm seeing a pattern where I had a great investment thesis, but didn't follow through as fully as I should - invested too little, sold too soon, etc.. Of course, easy to see in hindsight, but perhaps also too much awareness of how much the markets are too much Russian Roulette and too little skill. That said, I've also avoided many large potential losses. Perhaps the best advice I saw about this was tacked to the door of a rock & ice climbing school: Good judgement comes from experience. Experience comes from bad judgement. (The key is that you need to ensure that your bad judgement is never quite bad enough to take you out of the game) Good luck to us all.