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11 Interesting and Smart Books To Read On Risk Management

Learn to master the art of managing risk.

Risk is something ever present in life, day to day, even if you are not an entrepreneur yourself. Risk is defined as the outcome of uncertainty, meaning that for every situation (or business deal) we get into there’s a change it might work out or totally flunk, that’s risk, and you can learn to manipulate the variables that made that situation to make sure that outcome work in your favour.

Here’s a list of some of best book on Risk Management written by the real experts.

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#1 Who Moved My Cheese? by Spencer Johnson, Kenneth Blanchard

A short story about four characters and how they navigate a maze to find cheese. In the story the cheese they find is eventually eaten up and they must navigate the maze to find new cheese. The lessons are derived in how each character goes about dealing with this change.  There are plenty risks associated with change and whilst this book does not necessarily provide step by step instructions, it can provide a framework and a common language for talking about change and the management of change. I would highly recommend this less than one hour read to top level management to help discussions around change and risk management.

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Contributor: Lynsey Middler from Middlers

#2 How to Make Money With Real Estate Options by Thomas Lucier

As a real estate portfolio property manager I am always for ways to off-set real world property risk. 'How to Make Money with Real Estate Options' expertly articulates how synthetic financial products can be of immense value not only to offset risk but also to assist a portfolio manager in taking advantage of real estate opportunities. The book expertly articulates how insurance and option agreements can be of immense value to a real estate portfolio manager.

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Contributor: Matthew Reischer from Flushing Homes LLC

#3 The Most Important Thing by Howard Marks

It does a wonderful job of framing the risks of making investments. In particular, he goes into a well thought out, approachable discussion about the relationship between risk and reward in the world of investing. He lays out a strong case for more risk not equating to more reward, but rather more risk leading to a higher variability of possible return outcomes. This includes higher return potential, but also more risk for loss of capital.

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Contributor: Riley Adams from Young and the Invested

#4 Options, Futures, and Other Derivatives by John C. Hull

This book approaches risk management from a derivatives perspective, dedicating significant time to various types of financial instruments, trading, and arbitrage. It assumes no prior experience in the subject and gradually builds up the reader's knowledge.

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Contributor: Andrei Kovalev from Actualize Consulting

#5 Against the Gods by Peter L. Bernstein

This book is a great resource for anybody looking to understand the history of risk management through different epochs and ages. Though written in the 90s, this book is still massively relevant in this highly technologically advanced age which translates to convey that in spite of insightful and efficient systems of building business intelligence, there are always risks involved which need to be taken care of. The best part of this book is it never loses the interest of an average reader who doesn’t understand risk language, probability equations, and finance jargon really well. It easily helps you imagine the financial theory and probability models through real-world examples- the financial crises, the cultural ideas and understanding of risks, and how all of it has evolved our understanding of risks and finance today.

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Contributor: Ketan Kapoor from Mettl

#6 Principles of Corporate Finance by Brealey, Myers

This book takes a general look at corporate finance, with several chapters dedicated to risk management and hedging. It is written in an accessible, even entertaining language and is broken into topics for easier look-up.

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Contributor: Andrei Kovalev from Actualize Consulting

#7 Thinking, Fast and Slow by Daniel Kahneman

This book explains that we have two systems that drive the way we think. System 1 is fast, intuitive, and emotional; System 2 is slower, more deliberative, and more logical. The first part of the book is dedicated to a description of the two systems, the fast and slow system. This book also touches on things like the human energy budget and how thinking is metabolically expensive, cognitive ease and why we are “lazy”, and how we make decisions.

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Contributor: Mark Benjamin from Lasting Trend

#8 The Failure of Risk Management by Douglas W. Hubbard

This book talks about how some of the most popular risk management methods actually do not work as well as they should. It takes a close look at the misused and misapplied basic analysis methods. Using examples from the 2008 credit crisis, outsourcing to China and natural disasters, Hubbard shows how to fix all the critical flaws in risk management. His ideas are a combination of scientific results and frequently used methods across multiple industries. A good read for anyone looking to learn real methods.

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Contributor: Vladamir Sobur from Moshes Law

#9 The HEAD Game by Philip Mudd

This book gives us a guidebook on how to approach complex decisions. This book uses Mudd’s “HEAD” (High Efficiency Analytic Decision-making) methodology to bring you logical yet counterintuitive answers to any ordinary and extraordinary problems you may encounter. This method provides readers with a set of guiding principles to help you resolve your most pressing problems, all in five practical steps: What’s the question? What are you’re drivers? How will you measure performance? What about the data? What are we missing?

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Contributor: Alex Altuhov from HandyKith

#10 Taking Smart Risks by Doug Sundheim, Tony Schwartz

The premise of the book is that the business world is constantly moving fast and that in order to stay competitive you have to think quickly and act quicker - you have to find the middle ground and take smart risks. This book focuses on discovering, planning for, and acting upon the kind of risks that will move your company forward and ahead of the competition. It’ll teach you how to clarify your big idea in terms of real objectives, plan for breaks in communication, and how to efficiently move fast, among other things.

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Contributor: Igor Gramyko from High Water Standard

#11 The Essentials of Risk Management by Michel, Dan, Robert

The Essentials of Risk Management is a comprehensive guide to everything risk management. The book covers measuring and dealing with credit risk, risk management transparency and how to implement risk management systems throughout your organization. The book is written for novices and professionals alike, easy enough to understand, yet nuanced enough to be a fine addition to your referenceable collection.

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Contributor: Nate Masterson from Maple Holistics

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Written by Taegan Lion