Tag - Chicago Board of Options Exchange

Risk and Volatility | Lesson from Warren Buffett | Sheaff Brock

The Lesson Warren Buffett Says Hasn’t Been Taught in Business School

“Risk is not the same as volatility, but that lesson has not customarily been taught in business schools,” Warren Buffett observes. “Volatility is far from synonymous with risk.” In a 2015 letter to shareholders, the Berkshire Hathaway CEO wrote about the difference between risk and volatility. Many investors, he observes, “conflate these concepts, costing themselves money.” Yes, stock prices will always be far more volatile than cash-equivalents, Buffett concedes, but over the long term, currency-denominated instruments are far riskier than [...]