Behind the complex jargon and the technical details of its implementation, finance is based on very simple principles—chief among them, how to manage risk. Because every activity in life entails risk, especially those with the highest rewards, it’s not a question of avoiding risk altogether. Instead, finance is about exploring regularities—patterns of risk and reward—to manage the chaos of the world. As the father of Pragmatism, Charles Sanders Pearce, put it: We are all insurance companies.Understand that risk is omnipresent. It’s embedded in everything we encounter in business and in life.Risk is not complete randomness. Risk can be understood and managed.Risk management is about recognizing patterns to help us navigate uncertainty.