The tail-end events are all that matter

In an article written by Morgan Housel call The Three Sides of Risk, he buckets risk into three categories:

1. The odds you will get hit.

2. The average consequences of getting hit.

3. The tail-end consequences of getting hit.

"The first two are easy to grasp. It’s the third that’s hardest to learn, and can often only be learned through experience."

"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."

Reference

Author: Morgan Housel

Note Source: The Three Sides of Risk

Relevant:

#Risk