When you invest in stocks or any other asset, your primary risk is the permanent loss of capital. Your secondary risk is a sub-par return, and that’s it. You don’t have any other risk.

Most of the traders think and act like gamblers. They believe that they can outsmart the rest of the players with the help of a trading system. They take investing as a game, and daily quotes are their scorecards.

People like to risk pennies to win dollars.

Investing without a clear understanding of associated risk is like a child is playing with fire. Risk assets are called risk assets for a reason.

An investment business has certain risks, and your job as an investor is not to eliminate all risks but to manage and minimize them.

The actual risk is the permanent loss of capital or, to a lesser extent, a sub-par return. Temporary volatility in market price is not a real risk.

The outcome of an investment does not make it right or wrong.

Trading is not only a zero-sum game but an aggregate negative after deducting the trading cost and research expenses. Somebody’s gain is somebody’s loss, so the professional traders win the game because they have significant advantages over retail traders.

I know people who repeatedly jump from one guru to the next in search of the Holy Grail of trading. Of course, it doesn’t exist, but you need to know this fact to stop looking for it.