Using volatility as a measure of risk is nuts. Risk to us is 1) the risk of permanent loss of capital, or 2) the risk of inadequate return.

Just avoid things like racing trains to the crossing, doing cocaine, etc. Develop good mental habits.

Beta and modern portfolio theory and the like - none of it makes any sense to me.

I'd say 3/4 of advertising works on pure Pavlov. Think how association, pure association, works. Take Coca-Cola company (we're the biggest share-holder). They want to be associated with every wonderful image: heroics in the Olympics, wonderful music, you name it. They don't want to be associated with presidents' funerals and so-forth.

You've got to have models in your head and you've got to array you experience - both vicarious and direct - onto this latticework of mental models.

Stock-picking is like gambling: those who win well, seldom bet, but when they do, they bet heavily.

I think the main figure that matters to all of us, including people in the media, is: How does GDP per capita grow? And those figures have been very good. There is a huge flux both up and down, so it isn't like we're all static in status. What's important is that pie grows.