While most other investors are preoccupied with how much money they can make and not at all with how much they may lose, value investors focus on risk as well as return. To the extent that most investors think about risk at all, they seem con- fused about it. Some insist that risk and return are always posi- tively correlated; the greater the risk, the greater the return. This is, in fact, a basic tenet of the capital-asset-pricing model taught in nearly all business schools, yet it is not always true. Others mistakenly equate risk with volatility, emphasizing the “risk” of security price fluctuations while ignoring the risk of making overpriced, ill-conceived, or poorly managed investments.