How are you evaluating risk and what are the different sides of it? The following is an excerpt from an article written by Morgan Housel describing a deadly ski accident and how it changed the way he views risk:

In investing, the average consequences of risk make up most of the daily news headlines. But the tail-end consequences of risk – like pandemics, and depressions – are what make the pages of history books. They’re all that matter. They’re all you should focus on. We spent the last decade debating whether economic risk meant the Federal Reserve set interest rates at 0.25% or 0.5%. Then 36 million people lost their jobs in two months because of a virus. It’s absurd.
Tail-end events are all that matter.
Once you experience it, you’ll never think otherwise.

Follow Morgan Housel here on Twitter.

Visit his full blog here.

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