British rapper Zuby Tweeted “Shout out to everybody who has used the past 1.5 years to better themselves in some way though... or to CREATE something.” I replied “Shout out to anyone who didn't wallow and stagnate in the last 1.5 years.”
In line with the old Warren Buffett quote about finding out who’s swimming naked when the tide goes out, the pandemic revealed gaps that many people have in their emergency planning, their ability to figure out when to be skeptical and how to overcome obstacles.
I love the idea that many obstacles and challenges we confront can be solved or prevented by our own actions and behaviors. Predicting an epidemic is not a reasonable expectation but to the extent that people with chronic metabolic maladies were more likely to have problems from Covid, it is predictable that odds for better outcomes for many things go up when metabolically healthy and that can be within our control. It’s unlikely that someone could predict when a long power outage would happen, but we can have a generator of some sort, some extra batteries, flashlights and extra water.
With the pandemic, there were shortages and access to services were disrupted and depending on the resilience of those service providers, some services went away for good (businesses closing). We all heard anecdotes about gyms closing. However true that is, if gyms did close then at some point new ones will come but even if we did not understand how the virus spread before (do we fully understand now?) using a bunch of exercise equipment used by many other people in an enclosed area would seem to have a higher risk of catching the bug than being outside in a relatively uncrowded situation.
When the pandemic first started, I worked out at the gym with a mask on. My wife did not want me going to the gym because we knew so little about the virus. I was not going to give up working out but wanted to honor my wife’s request. One of the shortages early in the pandemic was weightlifting equipment. I had to solve my own problem. I had a lucky outlet for this, I could ask the community to make donations to the fire department.
The picture in the header of this post is what we accumulated from at least five different families up here as well as the Avodale, AZ fire department. More recently, someone also donated a Total Gym machine (think Chuck Norris infomercials). All of that and a jump rope is all I need. I’ve gotten a few of my colleagues in the department to start working out and hopefully I get more to start.
If not for weights donated to the fire department, I would have had to figure something else out. That something else would have been bodyweight exercises. Obvious exercises here include pushups, dips and planks but there are plenty of exercises. Figuring that out in detail would have entailed time spent on the internet learning what I needed.
While the above is all true, it is also a metaphor for financial planning. You will have obstacles, figure out what they might be as soon as you can so you can try to mitigate them before they become problems.
A quick pivot to Nassim Taleb. I’ve written countless posts about concepts he’s talked about over the years and how some of those concepts have influenced how I manage portfolios and other aspects of my life. A concept I’ve developed for myself is to take bits of process from various sources to create your own process. This in part pertains to Taleb. I’ve been a big fan of the concepts he’s talked about but disagreed with quite a few of the conclusions he’s drawn.
Lately he’s taken a lot of hits from various places in social media. Out in front of this might be Allen Farrington. Here is a very long read to explain what’s going on or if you’d rather here’s a shorter summary.
The catalyst is Taleb’s having changed his mind about bitcoin. He used to own it but lately he’s said plenty in multiple places about how it is not money, that it is a Ponzi and on and on.
Earlier on, Bitcoin was talked about as becoming a medium of exchange. That has not happened and it’s difficult to see that path from here.
The story has shifted to whether it is a store of value. The store of value idea has taken a beating in the most recent decline, but I don’t think that idea is dead. Gold is not a reliable store of value against very short-term outcomes so it is not clear to me that Bitcoin should be either. People worried about debasement of the US dollar and other fiat currencies aren’t thinking in one-month terms. Over the last month there has been no day to day consequence to money printing/bond buying or anything else. Will there be consequences over the next ten years and if so, can Bitcoin help? Has there been debasement over the previous ten years? You’ll get different answers to that question but Bitcoin is up thousands of percent in the last ten years even if it is down 40-45% from the recent high so from that standpoint, the store of value argument is not dead.
Of course, ten years from now Bitcoin might be gone, who knows? But that is the interesting thing circling back to Taleb. The thing that attracts me to it is the asymmetric opportunity; it goes to a bazillion, or it goes to zero. That is a concept I learned from him. So it is interesting that Bitcoin’s asymmetry no longer appeals to him. Another concept from him that I think he’s ignoring is the Lindy Effect which essentially says the longer something goes without dying off, the more likely it is to survive.
At this point a Bitcoin failure is more likely to be that the crypto world moves on without Bitcoin, the price implodes like down 99.9% not that it completely disappears.
Sentiment has gotten so aggressive toward Taleb that they’ve made his name a verb, to be Talebed which means to ruin your reputation very quickly with a few “dumb” comments. I don’t think his reputation is ruined but who cares what I think, what is more important is to take bits of process from various places to create your own process.