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Higher produces a more highly curved, concave utility function, which implies a higher degree of risk‐aversion. An investor with = 0 is considered “risk‐neutral.” His utility function is a straight line, so that maximizing Expected Utility will be the same as maximizing expected wealth. An individual with less than zero would be risk‐seeking and has a convex utility curve that increases faster and faster with increasing wealth. We do not think it makes sense for investors with substantial wealth to be even close to risk‐neutral, let alone risk‐seeking.
The Missing Billionaires
Victor Haghani and James White
An even simpler calculation would be to acknowledge that assets, those things of value owned by the company, minus the liabilities, those things owed by the company, equals the value of the company to the ownership at a certain point in time, or its “book value.” This is the essence of the balance sheet.
Buy Then Build
Walker Deibel
Discipline Equals Freedom To “what would you put on a billboard?” Jocko responded: “My mantra is a very simple one, and that’s ‘Discipline equals freedom.’”
Tools of Titans
Timothy Ferriss
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