Friday, December 8, 2023



Based on several references from my readers in the comments section, I am chipping away the book Antifragile by Nassim Taleb. I have a paper-copy in one of our water-closets.

One of the no-brainer strategies he suggests as a generic template for designing systems that gain from chaos and disorder is to "dumbbell" them.

This appeals to me because in a prior lifetime I fiddled with simulations of financial portfolios where the assets were rebalanced to automatically "harvest" the gains of the individual sectors that had out-performed and invest those monies in sectors that had lagged.

You don't have to run too many simulations before you realize that the best performance occurs when there is more separation between the classes you are playing with.

Source of graphic

For instance, over the long time-horizon one will consistently show much better appreciation and less volatility if you have a "wide" dumbbell of short-term Government bonds and a mix of US and International "Growth" equities of mixed company sizes.

Note: Companies with high Price-Earnings ratios are sometimes called "Growth" stocks while companies with low Price-Earnings ratios are called "Value" stocks.

One COULD invest in sectors that are close together on the investment map, say mid-sized and large low-PE companies or large low-PE and high-PE companies but the tide that raises and lowers them is synchronized and there is no time-offset that will contribute to the harvest.

Time domain

Another axis to consider is time.

What would I invest my time in if I knew I was going to die tomorrow? In 365 days? At my 3-score-and-10 (i.e. about five years). In twenty years?

If I thought I was going to die or become severely disabled in 365 days, I would directly plant seed-nuts in the field as I would not be able to move seedlings from the nursery to their final destination. I would plant the seeds more densely than I would plant seedlings (in general) because there would be high mortality.

I would also invest an inordinate amount of effort into "hardening" our house so the lovely Mrs ERJ would not have to worry about system-failures during her lifetime.

If I KNEW that I would be hale-and-hearty 20 years from now, I would plant the seeds in a nursery and transplant as one or two year-old seedlings. If I KNEW I would be around to care for them, I would plant them more densely since I would be around to cull the poor producers and the ones that produce poor quality nuts and fruit.

With regard to the hardening-of-our-house, I would put a concerted effort into correcting "short-cuts" that had been made during the hurly-burly of raising our kids.

One thing that my Dad showed genius at was that before he retired at the age of 67, he made sure that every major system in his house was "refreshed". New roof. New furnace and ducting. New light bulbs. New refrigerator....

He listened to coworkers who had retired and they told him that they did not feel that contractors "listened" to them after they had retired. They suspected that they might have been taken advantage of. They did not feel respected.

That ship already sailed for me. I am already retired. But I believe that a tradesman or contractor will be more attentive to a 64-year-old describing a problem than they will be to an 84 year-old. That is reality.

If you have been reading the blog for a while, you might have noticed that we upgraded with a new refrigerator, new washing machine, new dryer, new steel roof, new truck for me, new minivan for Mrs the last five years. I was paying attention to Dad. I might not be able to milk them for twenty years but I don't expect to be doing a lot of driving after I am 80.


  1. Message from the spelling police: You spelled dumbbell incorrectly !!!

    1. At least I made it to 9:58 PM local time before I made a spelling or grammar error. That is pretty darned good for me!

  2. Taleb is the poster boy for ADHD. Bounces from topic to topic. Impossible to accurately find you place if you fall asleep with out pushing a bookmark firmly in place.

    Setting yourself up mechanically and mentally to act when the when the chips are down and most are soiling their shorts is good advice.

    Also, he makes fun of everything that broaches stuffy. Very entertaining.

    I have been and/or acted like he advocates. Roger

  3. Off subject but I am hoping for more fiction from you. I really enjoy your writing.

    1. I realize that I left the folks on the Cumberland Plateau dangling.

      Watching Quicksilver messed up the cadence of my day. I think I will set the alarm clock for an hour earlier and see if I can be productive then.


  4. ERJ, that is a pretty genius move on the part of your father. To be fair, I think my father did the same with their house and cars; we are now on the latter part of that (and starting the earlier part of that here in New Home, for however long we are here).

    Of note, my both of my grandfather's and my father stopped driving a smidge before 82 (my dad and paternal grandfather by having to go into assisted care, my maternal grandfather by dying a month before his 82nd birthday) so that may be right on target. We may have one more car purchase in us which, with managing maintenance, we can hopefully make last 15 years.

    1. ERJ: Thanks for the good reminder to think about our 'major systems' in the family, especially as we get to that 'certain age'. Any thoughts to share on the 'minor systems that would be MAJOR when fail/decay' in the house such as hot water tank (you already had to deal with the well pump), chimney/fireplace (if it applies), heating/cooling, garage door, doors, decking, vehicle maintenance, computers, cell phones+accounts, and similar?

      There are the soft 'major systems' to consider when one of us goes home: access to records/investments/accounts/banking (electronic and physical), taxes and records, insurance, utilities, and so on? I understand the perspective depends on who does what. For example, I deal with all of the above, so I have written up and printed detailed information and instructions for access and maintenance in the event I go home first. That document gets refreshed at least once yearly, or any time something changes. And I have that (still uncomfortable) review with my dearest at those times. Especially frightening to me is that dearest is extremely averse to technology; even though we have gone through practice in electronic access to things, I have written up manual steps and contacts to get to the major things like banking and insurance. Dearest continues to insist she will go home first whenever we practice this... sigh...

      If one has pets, this is another 'system' to consider. We dearly love our pets and cherish their love on us. An uncomfortable (but needed) discussion is what happens to them when we both go home. We are not fortunate enough to have friends or family who would be willing to take care of them.

      -RB in flyover country


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