jbs

Why Volatility and Beta Matter

"In other words, a major decline in a stock may make the price a substantial discount from its previous level, but that does not mean that there is not a lot of risk"

I don't think anyone in their right mind would dispute this. It's a pretty solid argument. But Buffett doesn't contend that because a stock has dropped it is less risky. He has said that just because a stock drops doesn't make it MORE risky. These are very different assertions and should not be treated as the same. Also, he defines "discount" as a discount to intrinsic value, which is significantly different than "discount from previous price" as you have defined it.

Finally, as I have pointed out before, you are defining "risk" differently than the Motely Fool. Many value investors define it as "likelihood of permanent loss of capital" whereas you are referring to it as "variability." This difference in your definitions is important and was overlooked in this article.

This is not to say that the MF article was perfect - it certainly wasn't.

Steve Jobs' Apology: A 'How To' Lesson in Corporate Governance

There's a key difference between the situation Hurd and Jobs found themselves in: Jobs' knew (or was at least pretty sure that) he wasn't going to face severe criminal charges, while Hurd knew he probably would.

I don't like the comparison because although there's a good point to the article, the evidence here doesn't support it.

If Jobs knew his job and his freedom was safe, he loses nothing by accepting responsibility. Whereas if Hurd accepted responsibility as the author suggests, it would certainly be used against him in court.

So there's a valid point here, that honesty and accepting responsibility are key, but we have to remember that the threat of prosecution is a factor.