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What I Learned Losing a Million Dollars$
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Jim Paul and Brendan Moynihan

Print publication date: 2013

Print ISBN-13: 9780231164689

Published to Columbia Scholarship Online: November 2015

DOI: 10.7312/columbia/9780231164689.001.0001

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Rules, Tools, and Fools

Rules, Tools, and Fools

Chapter:
(p.117) 9 Rules, Tools, and Fools
Source:
What I Learned Losing a Million Dollars
Author(s):

Jim Paul

Brendan Moynihan

Publisher:
Columbia University Press
DOI:10.7312/columbia/9780231164689.003.0009

This chapter categorizes the responses of the people in dealing with the uncertainty. When faced with an eminent risk, a person behaves like one of three personas: engineer, gambler, or speculator. The engineer builds safety margins into his calculations to eliminate any fringes of uncertainty. He controls most of the variables which affect the outcome of his work. The gambler knows nothing about the event on which the outcome of his gambling depends because the distinguishing feature of gambling is that it deals with the unknown. The speculator does not have the advantage of the engineer, but the speculator does know more than the gambler because while the gambler is dealing with pure chance, the speculator has some knowledge about what determines the outcome of his activity. The chapter encourages any investors to be a speculator, saying that successful trading is the result of successful speculation.

Keywords:   uncertainty, engineer, gambler, speculator, speculation, risk, trading

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