Question

Topic: Strategy

Could Risk-averters Make Big Profits/ Returns?

Posted by Anonymous on 6/27/2010 at 1:51 PM ET 25 Points
"The greater the risk, the greater the return", does it mean that risk-averters do not make profits or have low returns compared to risk-takers? and why?
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RESPONSES

  • Posted by koen.h.pauwels on 6/27/2010 at 2:06 PM Accepted
    No. Fornell and friends JM (2006) showed that investing your money in stocks of firms with high customer satisfaction scores, lower your risk and increases your return
  • Posted on 6/27/2010 at 2:11 PM Author
    Thanks Koen for your response, could you please give a link to this source.
  • Posted on 6/27/2010 at 2:15 PM Author
    Phil,

    I also felt that one should be careful with risks and try to mitigate them before jumping on to them. How can we be so sure that return would always be big just because we took the big risk.
  • Posted by CarolBlaha on 6/27/2010 at 5:30 PM Accepted
    If you are talking sales-- risk is what we thrive one. Not nilly willy jump off the cliff stuff-- we put ourselves out there-- we call people cold we take rejection-- and then we call them again.

    Great salespeople making great commissions and making great results aren't "safe". They make calls most don't. That's why we thrive when others just want to survive.

    As far as stocks-- your portfolio depending on age-- should be a combo. It's all about what your stomach can handle. And stocks -- to me aren't a risk. I don't always hit a winner. But at least I know I researched it to death. And somehow, I make it work.
  • Posted on 6/28/2010 at 12:59 AM Author
    Carol,

    you are right about sales and its risks.. but we can forecast sales to a considerable extent too, can we not? We neednt always go for something unforseen... u cant b sure of what response u'll get for each cold call but still overall sales could be estimated...
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