Friday, July 29, 2011

Pack Your Parachute Carefully

“I do not risk my money until I can verify the facts.”   - Baron Rothschild
I came across a story about Warren Buffett that wonderfully that cuts to the chase regarding risk-taking.
It seems that an acquaintance of Buffett’s was doing his level best to persuade him to invest in a startup he had come across.  Buffett listened until the man had presented his case.  
Buffett then asked him: what did he figure were the odds of the company being successful?
The man mulled it over momentarily and then responded: 50-50.
Upon hearing that Buffett raised his hands and brusquely responded: if I told you a parachute had a 50% chance of working would you jump out of an airplane with it?
The pitch ended there.

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