When gamblers head to Vegas to place bets, they can use the odds that the casinos publish to make better wagers. But are the odds that casinos publish accurate? Even if they were, do most gamblers pay attention to them? It’s possible that some do, but in most cases gamblers are shooting blind. Besides, the odds always favor the house so over time, any wins will turn to losses, on average.
But when you are working with risks in other ventures outside of gambling, can you calculate the risks in a way that it can help you take chances easier? A calculated risk is a procedure where you analyze the pros and cons of a venture or investment and then determine the likelihood that it will be successful. There are plenty of financial wizards that will proclaim that it is possible. In reality, isn’t a calculated risk simply a guess and therefore the same thing as gambling?
When you analyze business ventures, there are many cases where you can draw from the experiences of similar ventures. If, for example, you are thinking of opening a small hardware store in your town, you can find out if there have been others in your surrounding area that have survived competing against the giant stores like Home Depot or Lowes. If you find that many have gone out of business due to pressure from these mega stores, you can make a calculated guess that it is probably not wise to open your own small hardware store.
The same can be true for stock market investments, at least to a smaller degree. If you find a company that is performing well and you are thinking of buying some of its stock, you can analyze other companies in that industry (or similar industries) and see what factors have made those other companies successful. You can then compare this to the company you are considering and see if it is doing the same types of things that the others are doing. You can use this information to calculate the risk that the company will succeed.
As you can see, there are situations where you can use the information available to calculate the risks of certain ventures. It can be used to guide you on whether to take a chance or not. It won’t be correct 100% of the time. But it certainly will be a lot better than odds that are available from a gambling establishment.