M. Pattabiraman talking about how he uses pessimism as a risk management tool.
A frequent criticism by those who encounter freefincal articles or videos is, “This guy is very pessimistic about equity investing”. I also often get asked why that is the case. Please allow me to explain.
There is a difference between lack of faith and pessimism. If I lack belief in equity, I will not go near it. Pessimism does not preclude participation. It only serves as a risk management mechanism. Pessimism prevents faith from turning into blind faith.
I use this strategy while managing projects. Being pessimistic helps putting in a plan for when things go sideways.