The Subjectivity and Relativity of Risk Assessments in Investment Decisions Standard valuation theory hold that the risk of making an investment is determined by the objective characteristics of the underlying business. I argue that risk, particularly for investors in small closely held businesses, is relative and to a degree subjective.
Sunk Costs and Loss Aversion Cost accounting teaches us to ignore sunk costs. Easier said then done because ignoring sunk costs often entails admitting poor decisions and accepting unrecoverable losses.
