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Welcome to RiskWerk!

June 4, 2012

RiskWerk is all about investment risk but we’d like to start by, first of all, thanking the good folks at WordPress for making these facilities available to us.

The “themes” that we have are surprising to both academics and investment professionals but there’s also a “common sense” to them which is, basically, what investment is all about – we are all investors or want to be investors and possibly, we need to be investors.

We can say, for example, on good authority, that “investment is just and only the purchase of risk, and, like any other purchase that we might make, we ought to know the price of it, that is, we ought to know the “price of risk.” Nor is it (as we will show) an exceedingly great mystery as to how one might calculate the “price of risk”.

Two other observations will also come as a surprise and shock to the establishment:

“Volatility is not risk.” – John von Neumann (1943)

and

“Probability is not what you think.” – John Maynard Keynes (1910)

despite an entire global investment industry that concerns itself with little else in the daily machinery of its work.

So armed, we can also say that investors do not invest in order to lose their money – too often the common outcome – but in order to keep their money and obtain a hopeful return above the rate of inflation.

Our subtitle is that “We are a Business in Societal Innovation and Enterprise” and one of our goals is to return the economy to the people who are in it and we hope to do that by talking plainly and sensibly about risk aversion and how to enforce it not only in theory but also in practice. It is our view that everyone, from school children to investors to professional investors, should know, and can learn, how to construct and maintain an investment portfolio in the common equities of the stock markets of the world that is “Alpha-smart with 100% Capital Safety and 100% Liquidity” guaranteed.

The Perpetual Bond®

“Alpha-smart with 100% Capital Safety and 100% Liquidity”™

Guaranteed

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