“**Asymmetrical risk reward is the essence of investing in stocks**, and is also essential for those who want to beat the market. An asymmetrical risk reward situation can be both positive and negative. “A positive one **is where you can only lose an amount that is smaller than the potential reward for the same probability**. “A negative risk reward situation is one **where you can lose more than what the potential positive reward is**.” ([Location 801](https://readwise.io/to_kindle?action=open&asin=B07CNFFJ9J&location=801)) --- **Tags** -- [[quotes]], [[asymmetric-distributions]], [[investments]], [[value-investing]], [[probabilistic-thinking]] **Source** -- [[202506221723 - LN - Modern Value Investing]]