The One-Million-Chamber Gun: Warren Buffett’s Lesson on Risk
W arren Buffett once posed a thought experiment that quietly dismantles how people think about risk. Imagine a gun with one million chambers and one live bullet. You are offered enormous wealth to pull the trigger once. The odds of survival are 999,999 out of 1,000,000. Rational? The probability says yes. Wisdom says no. This is the one-million-chamber gun problem. Buffett’s point is simple but uncomfortable: some risks are unacceptable, regardless of how small the probability appears. When the downside is irreversible—death, ruin, permanent reputational damage—expected value calculations become misleading. You don’t optimise for average outcomes when the worst-case outcome wipes you out. This idea sits at the heart of Buffett’s investing philosophy. He is not obsessed with maximising returns; he is obsessed with avoiding permanent loss of capital. That is why he avoids excessive leverage, complex derivatives, and businesses he does not fully understand. Even if such s...