PowerMF Blog – Empower Yourself

For scoring a six, you need to hit the ball in the air and the ball has to cross the boundary ropes without touching the ground en route. However, if the ball is caught by a fielder, the batsman is out. Hence, in order to get the maximum returns (6 runs) a batsman takes the risk of getting out. Even if he mistimes or misguides his shot by a fraction he will have to walk back to the pavillion.

However, if one keeps defending the balls, he gets very little opportunity to score runs. Hence, there needs to be an ideal mix of defense and risk taking for a batsman to be successful in his batting.

Equally, for a bowler to get a wicket, he needs to entice a batsman to believe that the ball is up for the hitting. For eg. a yorker is a great delivery to bowl for getting a wicket. Smallest deviation from where you want to bowl the ball, it becomes a full toss or a half volley and the ball gets whacked for a six or a four. Similarly, a spinner has to invite the batsman with a lot of air to his ball for getting a wicket, taking the risk of being hit for a six or a four.

This is a what risk vs. returns trade off is all about in Investments. You need to take higher risk for getting higher returns. If you are averse to risk, you can not expect much returns.

Please note that the converse is not true. Just by taking higher risk you don’t get higher returns. Eg. ‘Who Dares Wins’ or even in Cricket a very risky single which can at best give you a single run at the cost of loosing your or your partners wicket.

Same is the case with investing. If you want to get higher returns, there is a need to take higher risk. However, not every high risk action would result in the opportunity of getting higher returns. One should know what risks to take and when in order to be successful.

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