Gambling and Insurance

By Ramesh Akkineni
from notes of Berkshire Hathaway Meeting
Question: Isn't insurance like gambling, and made for the house? Is insurance for the fiscally challenged?
WB: Gambling involves creating risks that don't need to be created, [such as] betting on where a little ball falls on a wheel that's spinning. If you own a home, the risk is there. You can watch a football game without taking on risk, but you can't live in a house without taking on risk.
CM: The whole concept of house advantage is a very interesting one. In a lot of investment management operations, the proprietors of the funds are taking a rake like the croupiers of Monte Carlo, only bigger.

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