top of page

By:

C.S. Krishnamurthy

21 June 2025 at 2:15:51 pm

Risk Refines Returns

An anxious investor entered his adviser’s office, clutching a file of stock charts. He was convinced he had found the perfect moment to enter the market. His plan was to wait for the precise dip, jump in, make quick gains and exit smartly. The adviser smiled gently, the way a teacher smiles at a student who thinks the syllabus ends with the first chapter, and began narrating a small tale that has stayed with me for long. He spoke of two farmers. One sowed seeds as the monsoon clouds gathered,...

Risk Refines Returns

An anxious investor entered his adviser’s office, clutching a file of stock charts. He was convinced he had found the perfect moment to enter the market. His plan was to wait for the precise dip, jump in, make quick gains and exit smartly. The adviser smiled gently, the way a teacher smiles at a student who thinks the syllabus ends with the first chapter, and began narrating a small tale that has stayed with me for long. He spoke of two farmers. One sowed seeds as the monsoon clouds gathered, tended the soil, and trusted sun, rain, and time. The other waited on a hilltop for the perfect cloud, believing precision mattered more than action. He kept climbing, analysing patterns. When the rains finally came, the first had green shoots breaking the earth. The second had only reasons. The adviser paused and said markets behave similarly: prepare early, stay invested, and let time do the real work. This simple story captures a truth that investors often forget. Most people desire higher returns, but very few want the risk that accompanies those returns. In wealth management, the principle remains constant across decades: high return requires high risk, low risk brings low return. What separates successful investors from frustrated ones is not luck or timing, but the ability to align risk, return and time horizon with the purpose of money. Risk Realities Consider a parent whose child’s college fees are due next year. A rising equity market may look attractive, but it is the wrong choice for such near-term needs. Even a small correction can upset careful plans. Here, safety matters more than growth because the goal is fixed and non-negotiable. Now contrast this with a young professional in her twenties avoiding equity due to fear of volatility. Ironically, she takes the bigger risk. By shunning growth assets, she risks losing future purchasing power. For her, time is a powerful ally that cushions volatility and rewards patience. Wealth planning begins with understanding three elements. The first is risk capacity. This is the financial ability to take risk. It depends on income, savings, liabilities and, most importantly, time horizon. A thirty-year window offers room for market ups and downs. A one-year window does not. When capacity is misunderstood, investors either become too aggressive or unduly conservative. The second is risk attitude. This has nothing to do with spreadsheets, and everything to do with psychology. Some investors can see their portfolio fall twenty pc and continue sleeping peacefully. Others panic if their units fall two pc. Knowing one’s emotional bandwidth is vital. A perfect portfolio is useless if the investor abandons it during the first storm. Behavioural finance teaches us that panic selling, not market decline, destroyed long-term wealth. Balancing fear and greed matter. The third is investment need. This is often ignored because investors chase returns without asking what return is actually required to achieve their goals. If a goal needs nine pc annual growth, why chase fourteen pc with twice the risk. When all three elements align, portfolios stop being products and begin to act as strategic tools that move families closer to their life outcomes. Purpose Planning Remember, risk is not a bad word, nor an enemy to fear, but a knife to be handled wisely. In skilled hands, it slices food, and in a surgeon’s care, heals bodies with precision. In careless use, it wounds deeply. When aligned with goals and time, risk builds wealth. Long-term investing lies in respecting its sharp edge and using it with patience and discipline. In the end, the adviser reminded the anxious investor that the greatest financial risk is not volatility, but a portfolio that does not match its purpose. Timing the market might offer a few lucky victories, but time in the market builds lasting wealth. Seeds grow not because the farmer predicts rain, but because he plants them early and let nature work. That lesson holds for every investor. Goal setting, disciplined risk alignment and the patience to let compounding work turn uncertainties into opportunities. Wealth is not created by chasing returns, but by respecting time.  If you are ready to follow discipline in investment, risk can turn into opportunity. (The writer is a retired banker and author of ‘Money Does Matter.’ Views personal.)

When the Rocket Fails, Lift-Off Still Follows

ISRO’s recent PSLV stumble underscores why resilience, not perfection, propels innovation.

ree

India’s 101st PSLV mission which was launched on May 18 with great expectations, failed to place its satellite in orbit. For the public, it served as a reminder that even our most reliable systems can encounter setbacks. For scientists, however, such events are not failures in the traditional sense but an integral part of progress at the frontier of knowledge.


Science is not a sequence of guaranteed victories. It is a process rooted in experimentation, correction and thoughtful iteration. A 2016 Nature survey of over 1,500 researchers found that more than 70 percent had failed to reproduce another scientist’s results, and over half had failed to reproduce their own. These were indicators of the complexity of real-world science, where undocumented steps or subtle variations often determine outcomes.


Rocket scientists are acutely aware of this. They do not assume perfection. Each mission involves extensive simulation, rigorous testing, and preparation for the unexpected. Despite this, minor anomalies can result in major consequences. This reflects not incompetence but the inherent complexity of large systems.


What matters is how one responds - with analysis, humility and resolve. The phrase “rocket science” endures in public discourse not only because the field is demanding, but because it exemplifies clear thinking and precision under pressure.


This mindset is not unique to aerospace. Consider Dr. Katalin Karikó, whose research on messenger RNA was overlooked for decades. She was denied promotions and funding, yet continued her work. Her findings became the foundation for the mRNA COVID-19 vaccines used worldwide. Similarly, Jennifer Doudna, co-developer of CRISPR gene-editing, encountered skepticism and competition. Through perseverance and scientific refinement, she helped create one of the most transformative biotechnological tools and received the Nobel Prize in Chemistry.


In India, many technology-driven enterprises in diagnostics, clean energy, and agricultural biotechnology face similar uncertainties. These ventures rely not only on innovation but also on the ability to learn from mistakes and adapt. Progress often emerges not from the absence of error, but through a thoughtful response to it.


This culture of scientific persistence and risk-taking must be cultivated. Unfortunately, prevailing attitudes often do the opposite. In schools, failure is penalised. In academic research, it is quietly feared. In funding ecosystems, it is frequently misunderstood. Such a climate discourages experimentation, especially among younger scientists.


A mature scientific ecosystem treats failure as data. A failed experiment can reveal flaws in method or gaps in understanding. A rejected paper may sharpen one’s reasoning. A declined grant often prompts a more focused research question. These outcomes are but part of the process.


More difficult than failure itself is the tendency to internalise it. Self-doubt, hesitation, and fear of embarrassment often prevent people from trying again. Outstanding scientists are not immune to setbacks; they are simply better prepared to overcome them.


Globally, there is a shift toward greater openness about scientific failure. Journals now publish negative results. Conferences include sessions where researchers share what did not work. These practices improve transparency and reduce duplication of effort. India too is beginning to adopt this approach, particularly in its innovation ecosystem. However, formal scientific training still encourages caution more than curiosity.


Students and young researchers must understand that failure is not a sign of incompetence, but evidence of genuine effort. Thinking like a rocket scientist means not just solving problems, but anticipating and analysing them. Progress is measured not by unbroken success, but by the capacity to adapt.


This mindset should not wait until postgraduate study. It must be introduced early. At present, schools reward certainty and discourage open-ended exploration. Students are taught to memorise facts, not question them. Emphasis on correct answers often undermines creativity. Remember that in science, breakthroughs often emerge from uncertainty and surprise.


To prepare for a knowledge-based future, we must reimagine curricula. Educational frameworks should encourage experimentation, accept failure and promote interdisciplinary approaches. Students should not only solve problems, but define and refine them even when outcomes are unclear. Science fairs should value originality over polish. Exams should balance conceptual understanding with applied reasoning and classrooms must become laboratories of exploration.


The PSLV mission was met with composure and maturity by both ISRO and the public. It offers an opportunity to reshape how we view scientific progress - not as a linear path of triumphs, but as a process shaped by setbacks, analysis and informed risk. Great achievements, from Moon landings to gene editing, were built on such foundations. The true lesson is not to fear failure, but to respond to it with persistence and purpose.


Scientists are not miracle workers; they are professionals who test, refine and persevere. Much of their work remains unnoticed or takes years to bear fruit. Yet each contribution builds the scaffolding for future discoveries. This quiet determination is what truly defines science. The PSLV will fly again, and fly better, because of what this failure taught us. Likewise, India’s scientific future rests not only on success, but on how we rise after setbacks even more prepared, more focused and more committed. In science, as in life, what stands in the way often becomes the way forward.


(The author is the former Director, Agharkar Research Institute, Pune and Visiting Professor, IIT-Bombay. Views personal.)

Comments


bottom of page