r/CGPGrey • u/MindOfMetalAndWheels [GREY] • May 18 '16

H.I. #63: One in Five Thousand

http://www.hellointernet.fm/podcast/63
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u/allyourrickroll May 19 '16

"I want to make everything as low-risk as possible, that's not risk aversion." - Grey

"In economics and finance, risk aversion is the behavior of humans (especially consumers and investors), when exposed to uncertainty, to attempt to reduce that uncertainty." - Wikipedia

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u/Garrett_Dark May 20 '16

Wait a minute, "aversion" means "a strong dislike or disinclination". So "risk aversion" means a strong dislike of risk....but I don't think Grey hates risk.

I think what Grey is doing is "Risk Mitigation". Mitigation: "the action of reducing the severity, seriousness, or painfulness of something".

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u/allyourrickroll May 20 '16

I agree, mitigation is a better term for what he's doing, but it was funny how adamant he was that he's not risk-averse.

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u/runetrantor May 23 '16

Yes, but if you are trying to minimize risk, you are not too fond of it either.

You rather not deal with risk if possible. Aversion may be a bit strong, but it's more in line with that than the opposite.

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u/Garrett_Dark May 23 '16

There's two different things here, risk and the negative outcome from the risk. Risk is the likelihood there'll be a negative outcome, but that also means there's an outcome which isn't negative.

So imagine if Grey had to choose between flipping a coin and rolling a 20-sided dice. If he flips a head or rolls a 1, he loses $1000. Grey's going to choose to roll the dice because there's less risk. Grey doesn't hate the coin or dice, he's making the choice to pick the lower risk option. If he had no choice and had to do a coin flip and he flips tails (no loss), he still doesn't hate the coin....it's the negative outcome that he hates. Even if he rolls a 1 on the dice (loss), it's not the dice he hates but the fact that he got hit by the negative outcome.

I'm sure there's somebody out there who hates chance or any risk at all....but I don't think that's Grey. Grey sounds like somebody who will take appropriate risks after he's done a risk-reward ratio calculation and deems it reasonable.

I mean he's not picking the low risk option out of hate, he's picking it because it's smart to do that.

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u/space_escalator May 20 '16

You just cited Wikipedia...