The Art of Living in Uncertain Times
Uncertainty is the Condition that impels man to unfold his powers
We are living in uncertain times, there hasn’t been a time like this in recent memory. The world has gone scary and crazy, there is an invisible threat, bearing the name COVID-19, that is lurking everywhere waiting for its next target. People are feeling worried, anxious, scared, and helpless. Human beings are fragile animals, but we are also resilient rational beings with foresight, discernment, and the ability to survive, and even thrive, when the going gets tough.
For an attitude to surviving uncertainty, power is in avoiding an emotional reaction, it is in restraint:
*Just for interest, someone once asked me what observing things with magic meant. I have no claim to know exactly what Buffett meant, but Joel Greenblatt called Buffett’s investment strategy the Magic Formula, an investing approach from a methodical and unemotional perspective. I believe it’s that type of magic.
The Corona Crisis
For the first time in recorded human history, the whole world is simultaneously living in a state of deep uncertainty. It is easier to live in a world of certainty where everything is working like clockwork, but the reality right now is that we are uncomfortably confined in our homes while the world falls apart around us. Nobody knows what is going to happen next, so we should get comfortable being uncomfortable while uncertainty reigns. We should also honor the present by paying attention to what we are doing right now because what happens today and over the coming weeks will definitely impact our future.
“Uncertainty is the very condition that impels man to unfold his powers. As we navigate our own uncertain times together, may a thousand flowers of sanity bloom, each valid so long as it is viable in anchoring the human spirit it animates. And may we remember the myriad terrors and uncertainties preceding our own, which have served as unexpected awakenings from some of our most perilous civilization slumbers.”
– Erich Fromm
There are already numerous articles written about COVID-19 and it is not my intention to write specifically about that; that’s something I would rather leave for the experts. This article is a reflection on how to deal with uncertain times, because many people are having a hard time making sense of it all. I was feeling a bit uncertain myself as to how to best to deal with this tricky subject, so I consulted with the expert, Mr Nassim Taleb, author of The Black Swan and Antifragile.
Meaning of The Black Swan
The concept of a Black Swan Event originated from German philosopher Karl Popper. In his famous essay The problem of Induction, Popper said: “A scientific idea can never be proven true, just because no matter how many observations seem to agree with it, it may still be wrong.” Popper noted that many people believed all swans were white; millions of observations of white swans seemingly proved this theory. Yet, it was the discovery of a single black swan, living in Australia, which invalidated a theory based on millions of prior observations.
Nassim Taleb, a former options Trader, wrote his book, The Black Swan in 2007. The book focuses on the extreme impact of rare and unpredictable events, or Black Swan Events, which are events impossible to predict due to their extreme rarity. Taleb’s book popularized the term which is now commonly used to describe an unexpected event with dire consequences. As Black Swan Events may result in catastrophic consequences it is important for people to always assume, however unlikely, that they are possible, and plan accordingly.
According to Taleb there are three attributes necessary in order to call an event a Black Swan Event:
- Rarity. It is a rarity, an outlier as it lies outside the realm of regular expectations because nothing in the past can convincingly point to its possibility.
- Extremeness. Black Swan Events carry an extreme impact.
- Retrospective predictability. In spite of its outlier status, humans will come up with explanations for its occurrence after the fact, making it explainable and predictable.
Taleb also urges people to stop using the observable past as an indicator of the future, the don’t be a Turkey rule. The turkey is fed for 1000 days and thinks everything is all right and food will be coming. On day 1001, the day before Thanksgiving, everything changes.
A central idea in Taleb’s book is not to attempt to predict Black Swan Events but to build robustness to their negative impacts. The world is too complex for anyone to understand or predict exactly what is going to happen, and rather than naively try to predict Black Swan Events, we just need to be aware of the possibility and adjust to their existence
“Uncertainty is our discipline and understanding how to act under conditions of incomplete information is the highest and most urgent human pursuit”.
– Karl Popper
Black Swan logic can make what you don’t know more relevant than what you do know, normal is often irrelevant. You can only find out about people’s true temperament when looking at how they react under the tests of severe circumstances, not under the regular rosy glow of daily life. Can you understand health without considering the impact of wild diseases and epidemics on your well-being?
Five Tips to the Art of Living in Uncertain Times
So, what have we learned so far? We have learned that it is pointless to try to predict Black Swan Events, and the best thing to do is to build robustness and preparedness, fortune favors the prepared mind.
How do we do that? I can suggest 5 things:
1. Plan for positive and negative contingencies
Hope for the best, but plan for the worst. Planning is a form of rehearsal, it is is simply making decisions ahead of time based on all information you have available now. By making some of those decisions early, you will cut down or eliminate indecision or have all the things you need ready when it is time to act. Skydivers pack backup chutes and cars have spare tires.
2. Don’t be narrow-minded
No-one is perfectly open-minded all the time, but narrow-minded people cling desperately to their own way of thinking. Being open-minded is the willingness to search actively for evidence against one’s favored beliefs, plans, or goals. Don’t look for the precise or just look for evidence to back up your existing ideas. Don’t look for anything in particular but do be prepared for the unexpected. Don’t try to predict any specific black swan events because it will blind you to others that could occur.
3. Seize opportunities that come your way
Opportunities are much rarer than you think, they rarely knock at the door. Opportunity does not guarantee you a life without regrets, but if you have clarity of vision and higher aspirations in life, be it personal, academic, professional, then this could be the opening to lead you towards a more optimistic and purposeful life ahead.
4. Don’t waste your time arguing with forecasters
Prediction is possible only in a world in which events are preordained. Economists, analysts, or those who think they know better are often wrong; don’t just listen to the forecast, listen to the logic behind it. A forecaster must be able to articulate and defend their logic because that logic is what lifts forecasting out of the dark realm of the superstitious. The truth, particularly during a pandemic of a novel virus, is that nobody is certain what is going to happen.
5. Listen to a variety of opinions
Listen to a variety of opinions and then use your critical mind to come to your own conclusions. Exercise your own judgment and make decisions that fit your own situation and feel right for you and for the people around you.
[Feel free to add suggestions in the comments below.]
The Solution: Be Antifragile
We, as human beings, are aware of our staggering fragility on how physiologically vulnerable our bodies and minds can be. We are aware that terrible outcomes are always possible and often probable. Your Quest as a Human being is to protect yourself against the danger of losing your life but also against the danger of losing your mind.
This knowledge of our own vulnerability makes us go back and forth between ecstatic optimism and sheer despair. In order to cope with that awareness and to counterweigh the heavy sense of our own fragility we often rely on the hope that somehow, we will be strong enough to withstand the storm.
There are many ways to find a solution to the task of staying alive and of remaining sane; some are better than others. The better will lead you to greater strength, clarity, joy and independence. The worse will lead you in the opposite direction.
All systems can be categorized as fragile, robust or antifragile. Fragile things are exposed and destroyed by volatility, Robust things resist, and Anti-fragile things benefit from it. Nassim Taleb’s book Antifragile, published in 2012, is a continued reflection to The Black Swan written 5 years earlier.
“Some things benefit from shock; they thrive and grow when exposed to volatility, randomness, disorder, stressors and uncertainty. Antifragility is beyond resilience or robustness. The resilient resists shock and stay the same, the antifragile gets better”
– Nassim Taleb
Mother Nature, thanks to her antifragility is an expert at rare events, and the best manager of Black Swans. Over billions of years Mother Nature has succeeded in getting where she is today without the help of technocrats in suits.
Five Tips to Become Antifragile
1. Become Antifragile by removal.
The solution to many problems in life is solved by removal not by addition. Living a healthy life is more about removing, sugar, processed food and unhealthy snacks from your diet. Similarly, people become wealthy by reducing their exposure to going bust. Professional athletes win games by removing mistakes.
2. Become antifragile by being healthy.
Treat your body as a temple, worship it every day. Being unhealthy makes our immune system weak, which makes us more prone to disease, which in return makes us fragile. Hippocrates, the Father of Modern Medicine, is considered one of the most outstanding figures in the history of medicine. Hippocrates is known for saying: let your food be your medicine and your medicine be your food. According to his doctrine, the body contains within itself the power to re-balance and heal itself. Hippocrates was reluctant to administer drugs; his favorite treatment was fasting and apple cider vinegar. He recognized when people ate mainly a fresh, plant-based diet, they developed fewer diseases. (I wrote a whole chapter on Hippocrates in my book This Is Your Quest, feel free to check it out.)
3. Become antifragile by optionality.
The more options you have, the more freedom you have to respond to unforeseen circumstances, thus reducing your fragility to Black Swans Events. If you have optionality you don’t need to be right that often. All you need is the wisdom not to do things that will hurt yourself and to be able to recognize favorable outcomes when they arise.
4. Become antifragile by Tinkering
In order to be antifragile, try new things and find out through a process of trial and error what works and what doesn’t. If an idea doesn’t work, make it fail quickly then move on to the next one.
5. The Barbell Strategy
In finance, a barbell strategy is formed when a trader invests in long- and short-duration bonds, but does not invest in intermediate-duration bonds.Play safe in some areas of your life and take a lot of small risks in others.
A Twist to the Black Swan Story
Nassim Taleb was interviewed on Bloomberg on 30 March 2020 about the COVID-19 outbreak. According to Taleb, COVID-19 is NOT a Black Swan, it is a White Swan, he claims that the pandemic was totally predictable and could have been avoided?!
If you disagree or think that is a sensational claim, think again. Taleb wrote in 2007,
“As we travel more on this planet, epidemics will be more acute, we will have a germ population dominated by a few numbers and the successful killer will spread vastly and more effectively. I see the risks of a very strange acute virus spreading throughout the planet.”
Rarity is the first criteria that is necessary for a Black Swan event to happen, i.e. an event that lies outside the realm of regular expectations because nothing in the past can convincingly point to its possibility. In the case of a pandemic with dire consequences, it has happened before. The first case of the Spanish Flu was identified in November 1918. Approximately 500 million people or 1/3 of the world population were infected with this virus and the number of deaths estimated at 50 million worldwide. The Spanish Flu killed more people than World War I.
Whether COVID-19 can be categorized as a Black Swan or not is a moot point, because the reality of the situation is that most of us didn’t see it coming, and what we have to do now is damage control.
When all is said and done, what we have to do now is to stay still and heal.
Time to Heal
And the people stayed at home,
And read books and listened,
And rested, and exercised and made art,
And played games and learned new ways of being,
And were still, and listened more deeply,
Some meditated, some prayed, some danced,
Some met their shadows ,
And the people began to think differently,
And the people healed,
And in the absence of people living in dangerous, mindless,
And heartless ways,
The earth began to heal,
And when the danger passed away,
And the people joined together again,
They grieved their losses ,
And made new choices ,
And dreamed new images,
And created new ways to live,
And heal the earth fully,
As they had been healed. ,
– Kitty O’Meara
And this, my dear Friend is Your Quest.
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