We were talking to prospective clients a week or so ago, and one of them during the course of conversation cited the example of a shire horse that had got spooked whilst out on the road. It had probably only been a shadow, but it had evidently been enough to cause the horse to rear up and threaten to bolt. We expressed surprise that an animal as tall as one-and-a-half people, weighing at least 1,000 kg, and capable of pulling a load of perhaps 10 tons should be frightened of anything, let alone a shadow. "But they're flight animals," he replied.

And so, in many respects, are we. Many investors, faced with the growing likelihood of some sort of financial earthquake epicentred in the Eurozone, will be minded to panic first and ask questions later. But such a flight response tends to conflate what we call 'volatility' with what we term 'risk'. They are not exactly the same thing. More specifically, 'volatility' is an inevitable by-product of investing in public or exchange-traded or listed instruments or anything that can be purchased or sold in a financial market. As JP Morgan (the man, not the bank) once said: markets fluctuate.

And then there is risk. The risk that most concerns us is the possibility, however remote-seeming, of a permanent loss of capital. As JP Morgan (the bank, not the man) would no doubt attest, spuriously scientific measures of risk such as Value-At-Risk, which the bank helped to develop, only get you so far.

David Fuller's view Veteran subscribers will know that Tim Price's analytical / literary talents enable him to produce profound letters, funny ones, scary issues, and this latest offering is merely superb. I commend it to you.