1/

Get a cup of coffee.

In this thread, I'll tell you a story about a man and his dog.

This will help you think more clearly about volatility, risk, and the relationship between the two.

2/

This is Mr. Biswas Singh.

Friends call him "Biz".

He's 50 years old. He owns and operates several gas stations and convenience stores around town.

3/

This is Spock.

He's a 4 year old Golden Retriever who belongs to Biz.

He's a Good Boy.

4/

Every morning, Biz takes Spock out for a walk.

They go to a local park that has a beautiful trail.

They get there around 6am.

They walk along the trail for about an hour -- until 7am or so.

Then they make their way back home.

5/

Biz walks more or less at a steady speed -- say, 3.5 miles per hour.

Spock, of course, does no such thing.

Sometimes, Spock races ahead of Biz -- straining his leash.

Other times, Spock lags behind Biz, distracted by a lamp post or a squirrel.