Profit From The Unknown: Become AntiFragile

Startup Bros ^ | 2019 | Kyle Eschenroeder

[Bon mots]

My reason for posting this is simple.

The CoronaVirus is here to stay - like it or not. It has already had a strong effect on markets.

Assumptions:

• The CoronaVirus is a 'Black Swan Event'
• An Anti-Fragile Position is where one wants to be during such an event

So first, what is AntiFragile and what are some positions you can take as an investor to not just survive this black swan event, but to opportunistically take advantage of the coming irrationality and panic?

Q: What is AntiFragile?
A: There are three states you can be in for a black swan type of event:
1.) Fragile - If the market crashes, you will lose everything;
2.) Robust - If the market crashes, your investments don't really lose (gold?);
3.) AntiFragile - If the market crashes, you make a fortune

My question is: What are some of the AntiFragile positions you think will be best for investors during this current panic and black swan event?

[ronnie raygun]

The fragile are the left lemmings who look to their rat controlled government for protection as they were instructed

[Bon mots]

Here is a list of things I identified to help get this thread started...

So on this list you can easily identify what is what!

1.) Carnival Cruise Lines - VERY FRAGILE. Great opportunity for a 'short'. The cruise lines will not recover easily from this scare.
2.) TVIX down to the SPXS - these are AntiFragile investments. As the market dives, these will go up - a lot.
3.) GOLD - Robust. As you can see, the panic barely affected gold. As the market continued to dive, however, the price did go down a bit as investors sold some of their gold to cover positions.

What are some of yours?

[sauropod]

I’m in gold and silver

[Fzob]

Thanks for posting this. Taleb should be required reading for every Freeper. Forget that, every serious human being

[Bon mots]

I’m in gold and silver

So 'Robust' - safety.

I'm looking at SPXS - look at where it was in the 2008 crisis and where it is today:

AntiFragile. Get on the roller coaster! :)

[SE Mom]

Bookmark

[Hugh the Scot]

I’m in beer and ammunition

[Bon mots]

Thanks for posting this. Taleb should be required reading for every Freeper. Forget that, every serious human being

That's why I posted it.
Whatever happens with this CoronaVirus; it has spawned a black swan already.

70-80% of the people, even ones who know about it, still have 'normalcy bias' - this is when the astute can make a killing; or lose everything.

If you had 1000 shares of SPXS in February 2008 it would have been worth several million dollars. You can pick it up for a few thousand bucks today.

This is why we learn about these things!
Not only so that we may understand what is happening, but so that we may act boldly when the opportunity arises.

Why The SPXS?
Look at the three year chart (below):

The SPXS has just hit its lowest level in a decade - since the last crisis. So it is at the very bottom and markets are boiling. This is an anti-fragile position; but one with a long record.

Worth looking at if you have the stomach for roller coasters.

[wastoute]

Lead, brass, and steel have more value.

[Bon mots]

Lead, brass, and steel have more value.

They didn't do any good in 2008/9 and likely won't be much use now either.

You could have made over 40% in a day had you speculated on the VIX on Feb. 27! Then you could have bought a lot more ammo... if that's your thing.

This isn't over.

[bankwalker]

Thanks for the great post, but ... no one should be “investing” in 3x etfs, especially TVIX, unless they fully understand what is happening behind the scenes with them.

[dp0622]

Definitely for later reading when I am more awake.

For those who don’t like a lot of risk, you don’t have to pick the bottom to buy stocks at a good price. If a good stock loses 40% of its value it may be worth buying even if it loses another 10% after that.

[Bon mots]

Thanks for the great post, but ... no one should be “investing” in 3x etfs, especially TVIX, unless they fully understand what is happening behind the scenes with them.

Notice, I didn't use the word 'invest'; but 'speculate'.

Some want to ride the roller coaster, some want to watch, some avert their eyes...

[Larry Lucido]

Reads like every Amway training session ever.

[Larry Lucido]

Our hero

My hero:

Architech, physicist, and wrote the book on Risk Management.

(Actually, my hero is Jesus. George the character is kind of cool, though).

[Bon mots]

Reads like every Amway training session ever.

How so?
Not my blog.

Not a time to just sit, watch and wonder what's happening with your 401K or IRA...

[bert]

Anti fragile? what a load of crap

what he uses many syllables to describe is the term tough.

most Americans are too lazy to be tough. it requires deliberate effort

[Lurker]

I’m in copper, lead, and brass.

L

[Bon mots]

Anti fragile? what a load of crap

I guess it went over your head.

Professor Nassim Nicholas Taleb is one of the most brilliant minds alive when it comes to events like the one we are currently experiencing.

Taleb is the author of the Incerto, a five volume philosophical essay on uncertainty published between 2001 and 2018 (of which the most known books are The Black Swan and Antifragile).

He has been a professor at several universities, serving as a Distinguished Professor of Risk Engineering at the New York University Tandon School of Engineering since September 2008.

He has been co-editor-in-chief of the academic journal Risk and Decision Analysis since September 2014. He has also been a practitioner of mathematical finance, a hedge fund manager, and a derivatives trader, and is currently listed as a scientific adviser at Universa Investments.

His 2007 book The Black Swan has been described by The Sunday Times as one of the twelve most influential books since World War II.

The Corona Virus is a black swan event.

If every time someone uses a big word, you react this way, your life will indeed be tough.

The concept is simple:
You have a 401K?
Investments are:
1.) Fragile;
2.) Robust;
3.) AntiFragile

If you have a better or more enlightening source for financial guidance during times of turmoil, please share it.