Why Profit Exists in Markets: Frank Knight on Risk & Uncertainty | Investing Philosophy EP-04

What is the difference between risk and uncertainty and why does it matter for investors? In this video, we explore Frank H. Knight’s classic 1921 book, Risk, Uncertainty, and Profit, and its lessons for investing, business judgment, microcaps, and asymmetric opportunities. We discuss: - Why risk ≠ uncertainty - Why profits cannot be guaranteed in advance - How markets price in known information - Why judgment matters when probabilities break down - What microcap businesses can teach us about uncertainty - The 4C framework: Clarity, Classification, Courage & Conviction - How investors can identify mispriced and survivable uncertainty The bigger lesson: investing isn't about predicting the future perfectly. It’s about knowing what can be measured, recognising what cannot, protecting yourself from ruin, and making sound judgments under uncertainty. Read the full blog: https://zennivesh.substack.com/p/risk-uncertainty-and-profit-a-deep Book: Risk, Uncertainty, and Profit — Frank H. Knight The microcap examples discussed are for educational purposes only and are not investment recommendations. #investing #RiskVsUncertainty #FrankKnight #StockMarket #ValueInvesting #MicrocapInvesting #InvestingLessons #AsymmetricOpportunities 0:00 The illusion of foresight 1:32 Risk versus uncertainty 3:33 Navigating unknown markets 4:40 The 4C framework for action