How To Think About Risk - EP. 16

Risk is an often misunderstood and poorly communicated concept.
Even professional investors can be afraid of risk. 


However, risk is going to be a part of every single investment
decision that is ever made and there’s no such thing as a
risk-free investment. So hopefully, in this episode, we can
provide some tools and a framework to help you think about risk
and overcome any hesitance you may have. Brad and I discuss risk
from the academics’ perspective, real estate, and private equity
side; as well as risk deal killers, and general risks that factor
into any investment.


Key Takeaways:


[:10] About our topic of discussion today.


[1:51] How the academics think about and talk about risk.


[9:43] How we think about risk (in real estate and private
equity.)


[12:26] How Brad looks at to evaluate real estate risk.


[14:42] More factors that go into risk analysis in real estate.


[17:28] Are there any risk deal killers? What risks would kill
the deal?


[20:51] How I think about risk in private equity.


Mentioned in this Episode:


The University of Chicago


Modern Portfolio Theory (by Harry Markowitz)


University of California San Diego


Standard Deviation 


Volatility


Due Diligence


Base Case


Downside Risk


Market Risk


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