Look at Kelly Betting for some information on why “risk control” is utility maximization.
Presuming you have declining marginal utility for money, picking one random stock gives you the same average/expected monetary outcome, but far lower utility.
Look at Kelly Betting for some information on why “risk control” is utility maximization.
Presuming you have declining marginal utility for money, picking one random stock gives you the same average/expected monetary outcome, but far lower utility.