Let's shift gear to a very important topic, namely risk management.

How do you define risk?

I know that you are not a big fan of standard deviation.

So how do you define risk in your own methodology?

Well, I think, you know from my uh from my sort of

philosophical position i'm very suspicious as any kind of things like v a r any kind of the standard

risk risk metrics i just think that you know risk is risk is out there and your worst drawdowns always in

the future. And I find, I think, if you look back over time, you find, again, some pretty

standard risk profiles. You look at anybody who's been around for, say, 20 years or so, or maybe even

10. Almost every one of those managers has had a major drawdown by which I characterize as 50% or more.

And usually just one, right?

You know, I was fortunate, and mine didn't happen until 2013, so I went for a long time and living a charmed life in a way. But, you know, anybody who's been

around for a while has had one of those catastrophic drawdowns. And in some cases, those are called blowups

and they go out of business. Somebody like Richard Dennis did it three times, I think. You know,

if you can live through those, which again is much more a function of how well your

business is run and how stable your client support is and how dedicated your marketing team is,

if you can ride through those, then you can come out the other side. Okay, so I'm sort of getting off the subject, but as far as risk goes, no, I think the risk profiles of, to some extent, you can over manage risk.

There's just some things you just have to accept and you can't really control.

And I think the most important factor that has to do with risk is whether the manager is going to lose his head or not.

You know, the people who've survived in this business are people who've been able to weather those, you know, weather drawdowns without, you know, losing their nerve.

That's exactly it.

And so that's where the risk comes in.

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