Volatile things are not necessarily high risk, and nonvolatile things are not necessarily a low risk.
What are some good examples of where people commonly make this mistake?
“It looks ok at 100, it looks good at 90, it looks great at 80, it looks absolutely fantastic at 70, and you’re out of business at 60.”
As many investors found out, this was a poor measure of risk.
The problem of modernity is that our intuitions are ergodic, but our reality is not.