This is originally posted at https://hoanhan101.github.io/antifragile
Fragile things are exposed to volatility, robust things resist it, antifragile things benefit from it.
The antifragile system is made up of fragile parts.
- The weak one dies in the process while the strong one stays.
- Individual failure can provide helpful information to strengthen the system as a whole.
Shock and stressors strengthen antifragile system by forcing them to build up capacity.
- When human bounce back after traumatic accidents, hardships or failures, they become stronger.
- Lifting heavy puts the body to unusual stress and makes the muscle stronger.
- Even though The Titanic was a disaster, it made the ship cruising system stronger.
Trying to over-control systems often leads to fragility.
- Mom who overprotects her children prevents them from developing the ability to bounce back and adapt to future difficulties.
To take advantage of antifragility, you don’t need to understand the opportunities you see, just when to seize them.
- Society put too much value on theoretical or academic knowledge and not too much on a practical one.
- Often the most successful traders don’t know complicated economic theory or finance; they know when to buy and sell.
- The Industrial Revolution was not instigated by academics but hobbyists.
The shorter the time frame you observe an event, the higher the noise you will perceive.
Prediction in the modern world is impossible.
- We always find patterns, causes, explanations in past events, but they are useless for predicting the future.
- An assumption that the worst event we have witnessed must be the worst that could ever happen is simply false.
- What’s most likely to stick in the future is what has already been around for long.
- Instead of trying to predict what is going to happen, position yourself in such a way that you have optionality.
- The more options you have, the more ways you have to respond to unforeseen events (but not too many options).
- Prepare for failure scenarios.
Squeeze is a situation where you have no choice but to do it, regardless of the cost.
- They are the opposite of options.
- The larger something is, the harder the squeeze, the more damage it causes.
- Still, the larger something is, the harder it will be hit by unexpected events.
The Barbell Strategy suggests playing it safe on one side so that you can take more risks on another side.
- Cover your downside to protect yourself from extreme harm.
- Let the upside take care of itself.
- If the risky part plays out badly, you’re still fine.
- If a Black Swan event makes the risks pay off big, you profit handsomely.
Practical activities:
- Lift heavy weights or do HIIT.
- Practice intermittent fasting.
- Eat fermented foods, such as sauerkraut, kimchi, yogurt, pickles,…
- Take cold showers, ice baths, wear fewer clothes and sleep only with your sheets.
- Take saunas, do Bikram yoga and get a sweat on during training.
- Put most of your money in safe investments and 10% in highly lucrative ones.
- Keep your day job but take massive action on your side hustle at night.
