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1/14

Excellent question!

"Risk/reward ratio" is a term used in investing, but it's rarely quantified like one would quantify a debt/assets ratio. Risk/reward ratio is usually used more intuitively.


2/14

Usually people will use all their knowledge to make guesstimates about an investment like:

- 20% chance to go bust
- 20% chance to break-even
- 40% chance to double
- 10% chance to 4x
- 10% chance to 10x

And then state "for me, this is good from a risk/reward standpoint".

3/14

That last statement will be different for each individual though. For some people the investment laid out above may be great from a risk/reward standpoint, because of the high expected ROI. For others, it may be terrible because of the 20% chance to go bust.

4/14

Investing is much more complex than just making money and maximizing returns, and investment strategies should differ from individual to individual. If this is news to you, I strongly suggest you read through the first section of this blog

5/14

The final section of the same blog post goes into depth on $TSLA call options, and how I go about evaluating them. There is even a subsection called "The Risk Reward of Call Options" that should answer a lot of your questions.
1/ Learn more about the @USPS, its leadership and Louis DeJoy in Bill's conversation with Lisa Graves about how Charles Koch marked the Postal Service for privatization in the early 1970s and how he is using the Koch empire to push his political agenda to this day.


2/ She pointed to a recent report she authored for @PubInterest about Koch's efforts to popularize the fringe idea of privatizing the Postal Service and to capture the agency.

3/ When regulatory capture occurs, a special interest is prioritized over the general interests of the public. In 2006, one of his pro-privatization allies "James Miller was rewarded with a post on the Board of Governors for the Postal Service."

4/ "And from that perch in 2006, he pushed through this bill called the Postal Accountability and Efficiency Act, the PAEA, which really has dramatically harmed our Postal Service."

5/ Some people might say that they were trying to assure the failure of the Postal Service with the bill, which loaded it with burdens for the future that are not asked of any other government agency.