Adequacy : Moderate and appropriate nature. In the early days of the Roman Empire , Emperor Tiberius hosted a grand feast and invited an inventor. The inventor presented a glass as a gift, and the emperor inquired about its features. When the inventor claimed that the glass was unbreakable , the emperor dropped it on the floor. Only one side was dented, and the emperor touched that spot, restoring it to its original condition. Astonished, the emperor asked the inventor, “Have you ever taught anyone how to make this glass?” The inventor replied, “I did not tell anyone.” Then the emperor ordered his execution because if the recipe for the glass were known, the value of the emperor’s gold and silver treasures would plummet. No matter how excellent something is, it can be the worst depending on the situation and context. That’s why adequacy is essential. - Joseph’s “just my thoughts”
Volatility and Investment : The phenomenon where an asset’s price fluctuates over time is called volatility. Owning and reselling this volatile asset is known as an investment. The concept of buying and reselling an asset often causes us to overlook the fact that this process involves a trade-off between low-volatility and high-volatility assets. Cash is less volatile than stocks, and stocks are relatively more volatile. In other words, investing involves exchanging low-volatility assets for high-volatility assets and then switching back to low-volatility assets. Meanwhile, surplus profit is generated by the price differences caused by volatility. What would happen if we traded only highly volatile assets with each other? We would probably hesitate to exchange assets and might refrain from investing. In investing, there must be both low-volatility and high-volatility assets. - Joseph ’s “just my thoughts”