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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.
#FarmersAppealTotalRepeal

📌 Informative Thread

⛔ The fate of corporate farming. (Claims v reality) ⛔

🔴 Claim 1 : This would lead to better prices to the farmers as well as to the consumers. Better farm to fork availability as well as better farm prices for the farmer.

⛔ Debunking the claim : So this article by P Sainath, brings to light what the reality is for the small farmer in USA]

https://t.co/qcZyfEQWUd…).

📌 From the article : “The size is set by the retail chain stores. They dictate almost everything.”

The Word “almost everything” includes prices. While the Walmarts, Shop Rites and other chain stores sell his kind of onions for $1.49 to $1.89 a pound, Pawelski himself gets no more than 17 cents. And that’s an improvement.

#FarmersProtest

Between 1983 and 2010, the average price he got stayed around 12 cents a pound ".

⚠️ So what we see, is that neither there has been significant penetration of price benefits to the farmer, nor has it improved the availability to the consumer.

#FarmerBill2020

🔴 Claim 2 : Corporatization would lead to better capital investment and infrastructure, Bihar model is a success.

⛔ Debunking the claim : The reforms did not result in any significant private investment in new market infrastructure and a missing floor price due to the...