The probability of harm

This post from Andy Revkin is about tornadoes, but has a great and very relevant definition of risk. He writes, “Risk is the probability of harm, not the probability of storm.” That is, it isn’t the tornado (or the pandemic, or the earthquake) that creates risk so much as the lack of means for surviving it—tools like storm shelters, building codes, and vaccines all mitigate that potential harm. I like this for thinking about risk generally: you likely can’t stop or even predict storms in the form of bank failures, market collapses, or new competitors. But you can consider what you might need to defend yourself in those circumstances. The question then becomes not how to avoid the storms but how to prepare shelter for when they inevitably arrive.