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Rule Breaker Investing

Calculating Risk Foolishly: CRI vs. VA (2/3)

Rule Breaker Investing

The Motley Fool

Business, Investing, Invest, Rulebreaker, Stocks, Company, Growth, Stockmarket, Fool, Foolish

4.5928 Ratings

🗓️ 9 March 2016

⏱️ 28 minutes

🧾️ Download transcript

Summary

March is Risk Month here at the RBI Podcast, and today we continue with points #11 - #20 of our quantitative investment risk scoring system. The competition, the stock, and the management get the spotlight this time, along with a little secret sauce involving The Motley Fool's premium services.

Transcript

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0:00.0

It's the Rule Breaker Investing Podcast with Motley Full Co-founder David Gardner.

0:07.0

Welcome back to Rule Breaker Investing. I'm David Gardner. Thanks for joining me this week.

0:14.2

And it is March, and it is the month of risk.

0:17.8

That's what we've dubbed it here at Rule Breaker Investing.

0:20.2

So we're talking about how to measure the risk of individual stocks.

0:24.0

It's a novel thing and it's even more novel when you make it into a number.

0:28.0

So we put numbers on the risks of individual stocks and just to review a little bit about what we did last time.

0:35.0

So every stock that we rate is on a 25 point scale and the higher is the risk year.

0:42.0

So a 25 point risk stock is the riskiest thing that we can

0:46.4

ever imagine. We would never probably buy that stock. So the lower is the lower risk.

0:51.2

And we get there by asking 25 questions every single one of them is a yes

0:54.9

or no question and last week we went over the first 10.

0:58.6

So this is part two of our three-part series on measuring risk and I'm going to kind of dive back in right in the

1:04.5

middle. I do want to mention before we start that if you're just tuning in to Rule

1:09.3

Breaker Investing for the first time this week, I would encourage you, I would highly encourage you to go back

1:14.2

and just listen to last week's because it sets context and gets everything in motion for

1:19.2

understanding what we're doing this week. But even beyond that, if you are new to Rule Breaker Investing, I would

1:24.4

highly encourage you to go back to the start of this podcast and listen to our first five.

1:29.7

In fact, the very first one that you should listen to is are you a rule breaker a slight

1:34.0

pet peeve of mine the way we published them to iTunes it doesn't look like it's first

1:38.3

but that was the first one I did it's a short podcast I think it's about five minutes

1:42.2

long are you a rule breaker?

...

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