Another great one by the Oaktree founder. Some great quotes in this one…
"Thinking risk control is easy is perhaps the greatest trap in investing, since excessive confidence that they have risk under control can make investors do very risky things…thus the key prerequisites for risk control also include humility, lack of hubris, and knowing what you don’t know."
"Whereas risk control is indispensable, risk avoidance isn’t an appropriate goal. The reason is simple: risk avoidance usually goes hand-in-hand with return avoidance. While you shouldn’t expect to make money just for bearing risk, you also shouldn’t expect to make money without bearing risk."
"The probability of loss is no more measurable than the probability of rain. It can be modeled, and it can be estimated (by experts pretty well), but it cannot be known."
"Investment performance is a lot like choosing a lottery winner by pulling one ticket from a bowl…Superior investors have a better sense for the tickets in the bowl, and thus whether it’s worth buying a ticket in a lottery."