muses of the moment

December 26, 2013

Antifragile: gg’s thought #1

Filed under: Economic Crisis, Odds 'n ends, The Dollar Crisis — totallygroovygirlfriday @ 1:39 am

As gg mentioned she is reading Taleb’s Antifragile.

There are many good ideas and thought-provoking wisdom in the book. gg highly recommends it.

One idea is:

“The idea of proposing the Triad was born there and then as an answer to my frustration: Fragility-Robustness-Antifragility as a replacement for predictive methods.” Antifragile by Nassim Nicholas Taleb, Chapter 8, pg. 135.

groovygirl views this as a confirmation of the way she is looking at investments since 2005. Is the investment valuable as in the least, middle, and worst case scenarios? Does it put energy, time, and money into a long-term sustainable system, not just a protection against least and worst case scenarios?

As an example, let’s take food. We know that the current food distribution system is fragile in its design. There are only 3 days of food for a population in any given region. Anything, from an oil crisis to natural disaster to an infrastructure breakdown however local or short-lived, threatens regular food distribution. We also know that the inputs in our current food system long-term is unsustainable. Mono-crop intensive farming systems require larger and larger inputs of oil/gas, fertilizer, insect-spraying, machinery, and water, in spite of advances in questionable agriculture technology. I will not even go into the dangers of GMO.  So, short-term dangers are present and long-term sustainability dangers are present. How should one invest in food in a way that covers all possible outcomes. Covering all possible outcomes is impossible. So, we will focus on making the local system (the one we have control over) antifragile.

Buying food and storing it. If I become unemployed, I can eat the food. If the food distribution system breaks down for a 5 day to 30 day period, I have something to eat and share. If the long-term system becomes more and more expensive, I have something to eat or supplement what I can afford or give away to people who can not afford unaffordable food. If nothing happens I can still eat the food and save the food budget money for another expensive. (gg is pretty sure that some expense will go up in the future.)

Starting a patio garden or lawn garden depending on place is another option for those that can not afford to spend more money on food than is currently budgeted. Just growing and eating your own lettuce or other fresh vegetables can save money and be more healthful. You are more apt to eat the food you grow because of the time and energy you put into it. I will not mention the health benefits of getting outside on a regualr basis to tend and weed you garden, even if it is just a container on the balcony.

These are just a few thoughts.

How can a gold investment or a real estate investment be antifragile? How can a stock investment be antifragile? Think beyond robust to antifragile. Something that gets stronger or more valuable as the current centralized system breaks down.

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