--- title: "Meaning & Key Takeaway of: Perhaps, since the measurement of…" description: "\"“Perhaps, since the measurement of potential gain and loss from a particular stock is so subjective, it is easier, if you are a professional or academi..." image: "https://sms4smile.com/quotes/i/f6e/joel-greenblatt-21588_customer_perhaps-since-the-measurement-of-potenti_828357.jpg" --- # Perhaps, since the measurement of potential gain and loss… ![“Perhaps, since the measurement of potential gain and loss from a particular stock is so subjective, it is easier, if you are a professional or academic, to use a concept like volatility as a substitute or a replacement for risk than to use some other measure. Whatever the reason for everyone…” quote by Joel Greenblatt](https://sms4smile.com/quotes/i/f6e/joel-greenblatt-21588_customer_perhaps-since-the-measurement-of-potenti_828357.jpg) [Download](https://sms4smile.com/quotes/i/f6e/joel-greenblatt-21588_customer_perhaps-since-the-measurement-of-potenti_828357.jpg) [Open image](https://sms4smile.com/quotes/i/f6e/joel-greenblatt-21588_customer_perhaps-since-the-measurement-of-potenti_828357.jpg) > ““Perhaps, since the measurement of potential gain and loss from a particular stock is so subjective, it is easier, if you are a professional or academic, to use a concept like volatility as a substitute or a replacement for risk than to use some other measure. Whatever the reason for everyone else’s general abdication of common sense, your job remains to quantify, by some measure, a stock’s upside and downside. This is such an imprecise and difficult task, though, that a proxy of your own may well be in order.”” [Joel Greenblatt](https://sms4smile.com/quotes/author/joel-greenblatt/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Because risk is hard to measure, analysts often replace it with volatility, though this proxy can be misleading. **In simple terms:** Volatility isn’t the same as risk. Key Takeaway Don’t rely solely on volatility as a risk gauge. Themes risk assessment financial metrics investment strategy Mood critical thoughtful Type analytical strategic When to use this quote - stock selection - portfolio construction - risk management - academic research Key Concepts volatility risk quantification proxy measures Questions to Reflect On - How can you incorporate fundamental analysis alongside volatility? - When might volatility be a useful signal? A Different Perspective Volatility may reflect price swings but not underlying business fundamentals. ★ ★ ★ ★ ★ No ratings yet [Customer](https://sms4smile.com/quotes/about/customer/) [Difficult task](https://sms4smile.com/quotes/about/difficult-task/) [Investing](https://sms4smile.com/quotes/about/investing/) [Volatility](https://sms4smile.com/quotes/about/volatility/) ## Related quotes > [“everything that does not like volatility does not like stressors, harm, chaos, events, disorder, “unforeseen” consequences, uncertainty, and, critically, time.”](https://sms4smile.com/quotes/anonymous/everything-that-does-not-like-volatility-does-not-like-stressors-harm/) [Anonymous](https://sms4smile.com/quotes/author/anonymous/) > [The big picture is: the main thing you should be concerned about in the future are incremental returns on capital going forward. As it…](https://sms4smile.com/quotes/joel-greenblatt/the-big-picture-is-the-main-thing-you-should-be-concerned-about-in/) [Joel Greenblatt](https://sms4smile.com/quotes/author/joel-greenblatt/) > [“if your business ecosystem seems stable, don't be lulled into a potentially false sense of security. Big changes can happen very quickly. Don't confuse…](https://sms4smile.com/quotes/rich-jolly/if-your-business-ecosystem-seems-stable-don-t-be-lulled-into-a/) [Rich Jolly](https://sms4smile.com/quotes/author/rich-jolly/) > [Volatility is a symptom that people have no idea of the underlying value-that they have stopped playing the asset game. They're not buying because…](https://sms4smile.com/quotes/jeremy-grantham/volatility-is-a-symptom-that-people-have-no-idea-of-the-underlying/) [Jeremy Grantham](https://sms4smile.com/quotes/author/jeremy-grantham/) > [With volatility, you have the potential for greater gains but also greater losses.](https://sms4smile.com/quotes/edmund-moy/with-volatility-you-have-the-potential-for-greater-gains-but-also/) Edmund Moy > [Accounting does not make corporate earnings or balance sheets more volatile. Accounting just increases the transparency of volatility in earnings.](https://sms4smile.com/quotes/diane-garnick/accounting-does-not-make-corporate-earnings-or-balance-sheets-more/) Diane Garnick > [When a long-term trend loses it’s momentum, short-term volatility tends to rise. It is easy to see why that should be so: the trend-following…](https://sms4smile.com/quotes/george-soros/when-a-long-term-trend-loses-it-s-momentum-short-term-volatility/) [George Soros](https://sms4smile.com/quotes/author/george-soros/) > [There is little room for complacency, and it is important to guard against sporadic volatility in financial markets.](https://sms4smile.com/quotes/urjit-patel/there-is-little-room-for-complacency-and-it-is-important-to-guard/) [Urjit Patel](https://sms4smile.com/quotes/author/urjit-patel/) > [Asset managers have different approaches, and I don't wish to suggest there is only one way to run money. There are many ways one…](https://sms4smile.com/quotes/barry-ritholtz/asset-managers-have-different-approaches-and-i-don-t-wish-to-suggest/) [Barry Ritholtz](https://sms4smile.com/quotes/author/barry-ritholtz/) > [I mean, we've always had gold bugs, but now we sort of realize that Treasure Bills might be in the same category. And we…](https://sms4smile.com/quotes/robert-f-engle/i-mean-we-ve-always-had-gold-bugs-but-now-we-sort-of-realize-that/) [Robert F. Engle](https://sms4smile.com/quotes/author/robert-f-engle/) > [We've seen the volatility at dollar-yen, U.S. Treasurys, JGBs (Japanese government bonds), German bunds.](https://sms4smile.com/quotes/jamie-dimon/we-ve-seen-the-volatility-at-dollar-yen-u-s-treasurys-jgbs-japanese/) [Jamie Dimon](https://sms4smile.com/quotes/author/jamie-dimon/) > [There's only one thing harder than living in a home with an adolescent - and that's being an adolescent. The moodiness, the volatility, the…](https://sms4smile.com/quotes/jeffrey-kluger/there-s-only-one-thing-harder-than-living-in-a-home-with-an/) [Jeffrey Kluger](https://sms4smile.com/quotes/author/jeffrey-kluger/) > [If there is a single tragic flaw that mars our biggest enterprises, it is conservatism - the failure to fail, and fail big, in…](https://sms4smile.com/quotes/tom-peters/if-there-is-a-single-tragic-flaw-that-mars-our-biggest-enterprises-it/) [Tom Peters](https://sms4smile.com/quotes/author/tom-peters/) > [Any system that is deprived of its natural volatility, with government up (unintelligible) volatile, any system becomes very fragile.](https://sms4smile.com/quotes/nassim-nicholas-taleb/any-system-that-is-deprived-of-its-natural-volatility-with-government/) [Nassim Nicholas Taleb](https://sms4smile.com/quotes/author/nassim-nicholas-taleb/) > [Electricity transmission operates on a frequency between 49.7 Hertz and 50.2 Hertz. What I have done is petitioned the Central Electricity Regulatory Commission and…](https://sms4smile.com/quotes/jyotiraditya-madhavrao-scindia/electricity-transmission-operates-on-a-frequency-between-49-7-hertz/) [Jyotiraditya Madhavrao Scindia](https://sms4smile.com/quotes/author/jyotiraditya-madhavrao-scindia/) ## More by Joel Greenblatt > [Figure out what something is worth and pay a lot less.](https://sms4smile.com/quotes/joel-greenblatt/figure-out-what-something-is-worth-and-pay-a-lot-less/) [Joel Greenblatt](https://sms4smile.com/quotes/author/joel-greenblatt/) > [We are busy surviving, herding, fixating on what just happened, and being overconfident!](https://sms4smile.com/quotes/joel-greenblatt/we-are-busy-surviving-herding-fixating-on-what-just-happened-and/) [Joel Greenblatt](https://sms4smile.com/quotes/author/joel-greenblatt/) > [ There's a clarity that comes with great ideas: You can \[easily and simply\] explain why something's a great business, how and why it's cheap,… ](https://sms4smile.com/quotes/joel-greenblatt/there-s-a-clarity-that-comes-with-great-ideas-you-can-easily-and/) [Joel Greenblatt](https://sms4smile.com/quotes/author/joel-greenblatt/) > [The secret to investing is to figure out the value of something - and then pay a lot less.](https://sms4smile.com/quotes/joel-greenblatt/the-secret-to-investing-is-to-figure-out-the-value-of-something-and/) [Joel Greenblatt](https://sms4smile.com/quotes/author/joel-greenblatt/) > [Remember, it’s the quality of your ideas not the quantity that will result in the big money.](https://sms4smile.com/quotes/joel-greenblatt/remember-it-s-the-quality-of-your-ideas-not-the-quantity-that-will/) [Joel Greenblatt](https://sms4smile.com/quotes/author/joel-greenblatt/) > [Here is part of the tradeoff with diversification. 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You may…](https://sms4smile.com/quotes/joel-greenblatt/choosing-individual-stocks-without-any-idea-of-what-you-re-looking/) [Joel Greenblatt](https://sms4smile.com/quotes/author/joel-greenblatt/) > [If you spend your energies looking for and analysing situations not closely followed by other informed investors, your chance of finding bargains greatly increases.](https://sms4smile.com/quotes/joel-greenblatt/if-you-spend-your-energies-looking-for-and-analysing-situations-not/) [Joel Greenblatt](https://sms4smile.com/quotes/author/joel-greenblatt/) > [I still believe that for good business analysts a concentrated portfolio is a good strategy combined with a long term horizon. Once again, the…](https://sms4smile.com/quotes/joel-greenblatt/i-still-believe-that-for-good-business-analysts-a-concentrated/) [Joel Greenblatt](https://sms4smile.com/quotes/author/joel-greenblatt/) > [“Somehow, when ownership interests are divided into shares that bounce around with Mr. Market’s moods, individuals and professionals start to think about and measure…](https://sms4smile.com/quotes/joel-greenblatt/somehow-when-ownership-interests-are-divided-into-shares-that-bounce/) [Joel Greenblatt](https://sms4smile.com/quotes/author/joel-greenblatt/) [Explore all 29 Joel Greenblatt quotes ](https://sms4smile.com/quotes/author/joel-greenblatt/) ## More Customer quotes > [“Start a business, not a startup”](https://sms4smile.com/quotes/anonymous/start-a-business-not-a-startup/) [Anonymous](https://sms4smile.com/quotes/author/anonymous/) > [Amongst the financial Twitterati, the term 'muppets' has come to describe any client used and abused by some financial predator. 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Think AS the market.](https://sms4smile.com/quotes/michael-fishman/don-t-think-of-the-market-think-as-the-market/) Michael Fishman > [If Wall Street crashes, does Main Street follow? Not necessarily.](https://sms4smile.com/quotes/ben-bernanke/if-wall-street-crashes-does-main-street-follow-not-necessarily/) [Ben Bernanke](https://sms4smile.com/quotes/author/ben-bernanke/) > [The exact details of how you practice value investing will vary investor to investor, but the fundamental principle of scouring the world, looking for…](https://sms4smile.com/quotes/whitney-tilson/the-exact-details-of-how-you-practice-value-investing-will-vary/) [Whitney Tilson](https://sms4smile.com/quotes/author/whitney-tilson/) > [The best way to hold customers is to constantly figure out how to give them more for less.](https://sms4smile.com/quotes/philip-kotler/the-best-way-to-hold-customers-is-to-constantly-figure-out-how-to/) [Philip Kotler](https://sms4smile.com/quotes/author/philip-kotler/) > [Perhaps the most important reason to be skeptical of government inflation numbers is that the government, like a fox campaigning to guard a hen…](https://sms4smile.com/quotes/peter-schiff/perhaps-the-most-important-reason-to-be-skeptical-of-government/) [Peter Schiff](https://sms4smile.com/quotes/author/peter-schiff/) > [When the dollar collapses, it's not doing it in a vacuum. 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