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By Jason Zweig | Apr. 6, 2012 12:55 pm ET
Often, understanding where a word came from can help us understand what it does – and even what it should – mean.
In his brilliant book Against the Gods, the investment writer Peter L. Bernstein said:
The word “risk” derives from the early Italian risicare, which means “to dare.” In this sense, risk is a choice rather than a fate. The actions we dare to take, which depend on how free we are to make choices, are what the story of risk is all about. And that story helps define what it means to be a human being.
In most dictionaries, however, the standard derivations of the word don’t explain where the Italian root came from: Greek? Latin? Sanskrit?
Nor do most dictionaries give a satisfying explanation of what the root word might have meant. The Collins English Dictionary speculates that the original Italian verb, rischiare, “to be in peril,” stemmed from the Greek rhiza, or “cliff,” since sailing along rocky shores was supposedly dangerous.
But, given the range of real and imaginary hazards that ancient sailors feared (storms, diseases, sea monsters), it’s hard to see why Greek navigators would have regarded sailing past a cliff face as the epitome of “risk.” And the Oxford English Dictionary notes that this derivation is “unsupported by documentary evidence.”
The language blog odamaki recently drilled down deep into the origins of the word “risk.” The likeliest explanation: It came into Italian from the medieval Greek rizikon, “what soldiers can obtain through the fortunes of war,” a usage that dates to roughly the year 1160.
Medieval mercenaries depended for their livelihood on what they could plunder from those they conquered; the very term “soldier of fortune” should remind us that the destiny of mercenaries depends on their fortune, or luck.
We should also remember, as the ancient Romans and medieval Europeans did, that in order to have – and keep – a fortune (in the sense of wealth) you must also have good fortune (in the sense of luck). Your fortune is always hostage to Fortune.
The medieval Greek word rizikon, in turn, is derived from the Arabic rizq, or “sustenance, that which God allots, daily bread.” Rizq stems from the Syriac ruziqa, or “daily ration,” which originates from the Middle Persian roz, or “day.” As Odamaki puts it, the roots of our word “risk” moved “from Iran to Greece [and on to Italy] partly in the mouths of mercenaries.”
Etymologically speaking, then, risk is essential to survival. To take risk is to attempt to put food on the table.
The biblical term “daily bread,” as in “Give us this day our daily bread” (Matthew 6:11), has been interpreted to mean an amount of food “sufficient for our substance and support.” To say this prayer, as people have been doing in English since at least 1549, is to acknowledge the risk that without good fortune (or divine blessing) you might not make it through the day.
All this suggests that risk is more than just a choice; it is also fate. As an investor, you can choose to take more risk or less, but you must take some. You can’t eliminate risk. It is an inextricable part of investing, just as it is an irreducible part of life.
H/T: http://www.languagehat.com/
Source: WSJ.com, Total Return blog
Related: Entries for fortune and risk in The Devil’s Financial Dictionary
http://blogs.wsj.com/totalreturn/2012/04/06/why-investors-cant-escape-risk/