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Recently, while walking around Boone Hall Plantation and Gardens, in Mount Pleasant, South Carolina, my son and his family came across an alligator. They watched it, but wisely did not approach it. Risk aversion can be a wise decision. Seth Klarman, president of Baupost Group once wrote: “In contrast to speculators preoccupation with rapid gains, value investors demonstrate risk aversion by trying to avoid loss.” But as Paul Singer, another wise investor, remarked regarding the role of government in our economy: “…the forces of risk aversion and constant conflict serve to stultify and narrow the range of ideas up for debate.” We must walk the line, avoiding obvious risks, but being unafraid to speak out and take risks. “Security,” wrote Helen Keller, “is mostly a superstition. Life is either a daring adventure or nothing.” Eleanor Roosevelt’s advice: “Do one thing every day that scares you.”
Every day we make hundreds, perhaps thousands, of decisions that involve risk. Many, if not most, are subconscious – standing on one leg to put on our trousers, reaching high for a coffee cup, ignoring the slippery spot on the floor, crossing a street. Do we take the short cut over the mountain, or the longer but safer route? Determining risk is a measurement of success versus failure. In investing, businesses calculate the potential for profit against the possibility of loss, which is why the Biden Administration’s proposal to strip Pfizer, Moderna and Johnson and Johnson of their patent protections for COVID-19 vaccines add risk to all future investments drug companies make in research. If patent protection can be breached, what does that say to those who invest in scientific research, and to those who risk everything in the creative arts, all of which are supposed to be protected by intellectual property rights?
At a time when hesitancy has caused the number of daily vaccinations to decline by almost two thirds, the President, who was fully vaccinated in December, should not have worn a mask when outside and not surrounded by others. Yet he did just that last week when he and his wife left Jimmy and Roslyn Carter’s home. The message: the vaccine does not assure safety. When the FDA ordered Emergent BioSolutions to suspend production of Johnson & Johnson’s single dose vaccine because seven out of seven million vaccinated patients developed life-threatening blood clots, was the risk worth the cost of scaring people off being vaccinated? On Jimmy Kimmel’s show last week, Dr. Anthony Fauci said he was frustrated that nearly 26% of the population won’t get the vaccine, yet he said he would not dine in an indoor restaurant, despite being fully vaccinated. What kind of a message was he sending? Being vaccinated will not eliminate all risk of getting COVID-19, but it greatly reduces it. Responsible leaders lead, not inject fear.