Are We Rolling The Dice?

Photo by Brian Suman on Unsplash

There’s a difference between rolling the dice and taking a calculated risk. Often we tend to confuse the two. 

We avoid taking specific actions in specific areas of our life because we believe “it’s a lottery”, when instead, there are parameters - fundamentals - that we can assess, evaluate, extrapolate to come to a reasonable expectation of an outcome. 

In other words, while there’s absolutely no certainty in the outcome, we can develop a reasonable sense of confidence as to what the probable developments might be. If we then take a specific action towards that outcome, that’s a calculated risk. Starting a business, investing in stocks, can fall into this bucket of activity. There are no guarantees but we can work to understand and manage towards our desired outcomes. 

On the other hand, there are areas of our lives where there are no fundamentals, no objective parameters that we can measure and evaluate. Where taking an action is simply a guess, driven by emotion and FOMO more than any calculated measures of performance or expected outcome. 

The current action in cryptocurrencies (e.g. Dogecoin) would appear to fall into this camp. (To be clear, I don’t mean the value of and potential long term benefits from crypto, rather the current boom in prices.)

Rolling the dice versus taking a calculated risk. 

It’s worth taking the time to do our diligence and (try to) objectively tell the difference between the two. 

Are we focused on the fundamentals and working off of them? Or are we simply speculating?

The choice is ours to make, but one is not the other.