Do you have a stop loss? In life, like in business, it is important to have an asymmetric exposition to risk. In other words, you have to get ready for the worst case scenario! How? Through what is called a stop loss. For instance, if you’re investing your money in a stock and you bought it for $10, you must place a stop loss so that you won’t risk your whole capital.
The same applies to business in general. For instance, if you’re investing in a startup, always ask what’s the worst case scenario? And what am I going to lose from it?
If you’re losing way more than you can ever earn from an investment, DO NOT GO FOR IT!
Only when the potential positive outcome of the investment is way greater than the potential loss YOU WANT TO GO ALL IN!
For more technical stuff read here.
