Downside Risk

Before you invest in a security, you (hopefully) think a bit about the downside risk, i.e., that you lose money. Like...how low can it go? Many investors look at net cash on the balance sheet as a kind of "protector" of the ultimate downside. Like...in the early 2000s, Apple had $50 billion in cash, no debt—and the entire company traded for a valuation of about $50 billion. (It grew from there—this little thing called an iPhone moved the needle.)

Downside risk—fear gets balanced with The Upside—opportunity and/or greed. Remember that "fear and greed" speech from Wall Street? It's one of the best out there from guys with great hair. Greed is good. It motivates. Follow your dreams. But listen to your nightmares.