RE: There is no luck involved, at all!28 Jun 2022 09:29
It is not about luck at all. I completely refute that notion and (to use the words of Cmdr Jo Galloway) strenuously object!
It is instead a combination of risk and hazard and defining this is quite complicated and often misunderstood or interpreted differently by different functions or organisations.
In simple terms risk is likelihood of something happening (LOW MED HIGH) x severity (SLIGHT MODERATE EXTREME)
A hazard is the potential harm caused if not controlled. An example could be an activity like a parking manoeuvre or driving at speed....plus many others which could be unknown until they happen)
The goal is to reduce both risk and hazard to as low as is reasonably practicable (ALARP) (either don't drive [or invest] and if you do make sure you do so at 5 mph whilst wearing a seatbelt, helmet and wrap your car in bubble wrap and only drive on closed roads with someone there to guide you plus SWIR anti collision detector systems on your car.......)
The same may apply to investing in shares.
Ask yourselves this question.....is the risk of Nanoco's novel technology having disruptions in it adoption in emerging technologies low, medium or high and what are the implications if a DOW or Apple or STM pull out occurs on your finances if you are heavily invested...?
What are the hazards? Price, IP theft, too early to adopt, poor performance, competition, alternative methods
Another question, if STM were introducing the same tech is the risk the same? (likely less as they have more established customer and routes to push into the market for adoption) but that doesnt guarantee adoption. X what is the severity if the tech isn't adopted -less because they have multiple revenue streams.
In relation to Hazards they are likely similar but I'd conclude STM is the lower risk company (this is nothing to do with CFQD's) if a choice between the two based on an ALARP approach to investing. But the returns could be lower too for the same reasons. Or the returns would be higher, or rather the losses less if Nanoco fails again then it's likely a bust and back to being an IP shell.
So we have all taken a view, a gamble perhaps based on odds that are in reality not much different to a hazard/risk identification exercise and then confused the pure luck of gambling on roulette with risk, but even then you can reduce your risk on roulette by covering more numbers.....but the hazard goes up if the one you didn't cover comes in.
So in summary it's all to do with luck.
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