Let me pose a question: What’s more valuable?
- Investing 10 million dollars in a program that will return 20 million dollars in 3 years with 100% certainty…or
- Investing 1 million dollars in a program that will return 3 million dollars in 3 years with 50% certainty?
Basic theory says the first option is more valuable. I can expect to accrue 10 million in profit on an initial investment of 10 million. In the second scenario, if I can find 10 similar investments, I can expect to receive 5 million in profit — since I am losing the principle on half of my investments.
