This perspective mirrors the nature of entropy in that systems tend to evolve towards a state of higher entropy or disorder. Explaining the meaning of ‘disorder is probabilistic’, fs.blog states: For every possible ‘usefully ordered’ state of molecules, there are many, many more possible ‘disordered’ states. Just as energy tends towards a less useful, more disordered state, so do businesses and organisations in general. In the same manner that energy naturally gravitates towards a disordered state, investments, without intervention, can move towards underperformance. Apart from interesting tidbits about how paying no attention leads to bonanza, not paying attention to one’s investments is bound to lead to poor returns and missed opportunities.

Source: Economic Times September 18, 2023 14:07 UTC