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Business Success

Business Success

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Published by sumanparvez
Business Success
Business Success

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Published by: sumanparvez on Dec 29, 2012
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11/07/2014

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Chapter 5

Make Dollars -
Use Sense

68

We believe that it’s more proftable to compress as much labor as possible into a shortened timeline to create
the maximum effciency and to overwhelm your market. Working more may not necessarily be better for you
personally, but it is more proftable than a slower evolving business. For us, the main point in maximizing one’s
discretionary income is to apply this leverage to charitable works, and to spend more retirement time with your
family on the beach, or on your own dream of choice.

Hedge Risk

When going into business, you are essentially reviewing and strategizing your options and then placing your
bets. By placing more high quality bets, you are hedging your risk and limiting your potential losses.

Diversifcation of your investments is a tried and true way to protect yourself. On the other hand, it limits
your upside potential too, since, by defnition, all of your money will not exclusively be in the one most
proftable investment; instead, it will be hedged (or balanced) across a number of deals for safety’s sake.
In theory, this is one reason why mutual funds might be safer than individual securities but will also have a
smaller upside potential.

You can’t wait for a risk-free deal to invest in—because there is none! And if there were, it could only promise a
miniscule return, no better than a bond.

Not betting consistently on the best deals you can find and instead trying to time your market entries and
exits at the expense of fundamental research and conservative investing is unlikely to work, unless you
are extremely gifted.

Nothing is guaranteed for the market leaders or their followers. As long as you know what you are doing, taking
risks can actually be less dangerous than not taking them. Playing it safe instead of proactively conducting
business might not be so safe at all.

Hedging bets is the same as hedging risks. While any one risk might be too risky, hedging across many smaller

deals can create balance and hopefully less risk, if each bet is educated.

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