The CEO and Chairman of Berkshire Hathaway, Warren Buffett is an investor, a philanthropist, and a businessman. He makes his money investing in different companies, he was a millionaire at a very young age.
In fact, Warren Buffett talks about risk management as part of his business. The CEO understands that you have to take risks, but you need to know what you are doing. He also defines risk as the possibility of loss or injury. Therefore, he said, if it has a risk, don’t go ahead.
Furthermore, Warren Buffett recommends monthly investment in Index funds. He explains that a CEO position means a risk officer. Consequently, he is sure that when he takes a risk is because the overview of the operation is positive and will make him profits.
Afterward, Buffett’s emphasis on risk management for investment success. Indeed, learning to recognize it to avoid it. Therefore, one of the objectives of each investment is to identify them first, fill comfortable with the business and recognize price and value. The systematic risk can follow a material one and also it is unpredictable, as the stock market.
There is also the unsystematic risk, that one is more specific when you invest in stocks, industrial companies, or assets and securities. You still need to know how to handle it to be successful. In fact, you may take risks to gain or lose, select investments and manage portfolios.
Warren Buffett Risk Management theory is, he hires people he likes, and that he knows they love their job more than the money they received from doing it.