Antifragility

With the return of Steve Jobs, Apple became a titan of the tech industry, but the COVID crisis has proven that Tim Cook’s Apple is truly “antifragile,” in that it grows stronger under adversity.

But I don't own it. Here's why.

Earlier this month, an analyst for UBS made waves publishing a note about Apple (NASDAQ: AAPL) . Steve Milunovich asked: "Is Apple an anti-fragile.

Companies are complex systems. They are their own organisms.They are not inanimate but biological. With that view in mind, biology has coded in the ability to be antifragile. So, companies (like humans) are harmed by the absence of stressors.Applying load and introducing stress is a way to unlock incredible potential for continuous improvement. You can accomplish this by using one idea at a time for going beyond resilience.Start today.

Why has the coronavirus pandemic made some companies stronger and blown others to bits?

I was thinking recently about COVID-19, and stocks, and the concept of antifragility, which was coined by Nassim Taleb. Here's how he introduces it in his

“Difficulty is what wakes up the genius.” ― Nassim Nicholas Taleb, Antifragile: Things That Gain from Disorder According to the Merriam-Webster dictionary, fragile is easily broken or destroyed  constitutionally delicate: lacking in vigor  When subjected to volatile situations, fragile things break. But there are times when volatility ends up benefiting the object instead of degrading … Continue reading "becoming antifragile"

Nassim Taleb described and dubbed the concept of antifragility first. A positive attribute opposite fragility. Apple is a winner. It has a dominant profit share, and it's the team to beat.

In spite of views by some investors and critics, Apple is an "antifragile monopoly" that can withstand competition from other giants in the high-tech sector like Amazon and Google, an analyst argued on Thursday.

Instead, I watch these three things. It's made a world of difference.

Antifragile – by Nassim Taleb ‘Things that gain from disorder’ Wind extinguishes a candle but energises fire. Likewise with randomness/uncertainty/chaos, you want to be able to use them, not to hide from them. You want to be the fire and wish for the wind. Most people think the opposite of fragile is robust, resilient or […]

Nassim Taleb argued that there ways for investors to not only survive in a seemingly random world, but to thrive, to become antifragile. It’s a thought-provoking idea. But how can we actually do it? Can we create antifragile portfolios?

Nassim Nicholas Taleb describes antifragile systems as ones that gain from random events. Does Bitcoin fit the bill?

Nassim Nicholas Taleb wrote an insightful book “Antifragile: Things that gain from disorder”. The concept is so powerful and relevant not only to investing but our life in general. I thought of doing a short piece highlighting a simple concept helping you to become an Antifragile Investor.First things First. Some definitions.Fragile – Things that break under pressure.Resilient –Things that can withstand pressure and stay the same.Anti-Fragile- Things that grow stronger with pressure (or shocks).Author Taleb starts off with a powerful line in the Prologue, “Wind extinguishes a Candle and energizes fire.” In short, he says that a wind can blow off any candle while spreading fires making them stronger. The whole concept of Antifragile is based on this simple yet powerful thought “Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder and stressors”. A look at our current environment and we will see many examples of fragile, resilient and antifragile companies, and people.So how does one really become an Antifragile Investor in this chaotic world. The answer lies in this simple yet powerful “Barbell” strategy. We have all been exposed to Barbells in the gym. What do you think is common in all the barbells in your gym or home? Both sides have equal weights. Have you ever seen a Barbell which is heavy on one hand and lighter on the other? What happens if we put more weight on one side and very little on the other? You can never exercise with an uneven barbell and it can also injure you. This is exactly what happens to most investors as they invest with uneven barbells. Confused! Let me explain.Most investors are too aggressive or too conservative. Yes, I know people say they are balanced but then one still sees a lot of money not required in the next 15- 30 years in bonds and fixed deposits. Very rarely do we see investors who are super conservative and super aggressive at the same time. This is the essence of the barbell strategy: being super conservative and super aggressive at the same time. Yes, it is totally possible and this is how you do it.There are multiple ways to do this and I share a way for literacy purposes only. You should seek the counsel of a real professional before you attempt it yourself. This is how Ajay Sharma (name changed), an Antifragile Investor does it. He invests all Long-Term money into a Diversified Portfolio of Equities (through mutual funds). He has Zero allocation to Debt. This is how Ajay is Super Aggressive. I am not getting into the Sectoral exposure or private company exposures he has. The money he does not require in the short term goes into Equity only. His cash flow is stable. He is comfortable with the volatility of the markets (he understands it’s normal) and he knows that the value of the best companies goes up during such times (only their price goes down). This is how Ajay is acting Super Aggressive. At the same time, he keeps funds that he requires in the short term or unforeseen cash requirements that might come up (strategically or opportunistically) in Liquid Funds only. This is being Super Conservative. Ajay keeps higher than the traditional recommended levels in Liquid. Now this Super Conservativeness allows him to be Super Aggressive at the same time with most of the investments. He did not worry or panic when the markets nosedived in February/March 2020. In fact, he bought and has made stellar/abnormal returns in the last several months. Beyond the fact that he had the right behaviours of a successful investor (and the fact he avoids the financial porn of the media), he has the choice because of his super conservative investments to not panic. Additionally, the Antifragile Investors find comfort to invest whenever they have the money to invest. They do not waste time in even thinking about timing the markets. They know that while they are investing now, they are not investing for NOW or even for the next 1 year. They are investing for the future.The classic mistake that most investors make is either being too aggressive by investing everything in equity or being too conservative by investing the majority in debt. The barbell approach is an optimal approach to investing and can help you address some of the classic behavioural mistakes that people fall into. Needless to say, Human Stupidity is infinite, and no approach is thus full proof and is always only good as the person who is using it.I end this post with one of the author’s gems on the concept. “Antifragility has a singular property of allowing us to deal with the unknown, to do things without understanding them – and do them well. Let me be more aggressive: we are largely better at doing than we are at thinking, thanks to Antifragility. I’d rather be dumb and antifragile than extremely smart and fragile, any time.”Thus, the equation for successful investors: Dumb and Antifragile >>>>>> Extremely Smart and Fragile.

And why that reason helps me not worry about volatility.

I thought I was late on Zoom. I was wrong.

With shares down 50%, I wasted no time buying in.

VIA NEGATIVA VIA NEGATIVA is a technical term for the negative way of theology, which refuses to identify God with any human concept or knowledge, for God transcends all that can be known of him. Yet the term points to the possibility of union with God and the experience of his presence. Source for information on Via Negativa: Encyclopedia of Religion dictionary.

Minimalism has been a popular lifestyle choice for thousands of years. Does it have drawbacks, though?

As part of our ongoing series, Andrea Ruotolo, Ph.D. shares insights on antifragile systems and how they relate to the power industry.

When the times get tough, the tough get going.

What would you say if I asked, “What’s the opposite of fragile?” Most would say unbreakable, strong, or sturdy. Author Naseem Taleb however, argues that the opposite of fragile isn’t strong or sturdy, but ANTIfragile. Right now, you’re probably thinking: “Steve, that’s not even a word. What the heck are you talking about?” Welp, I read Taleb’s book, Antifragile: […]

Three simple criteria have helped me pick successful investments.

Here's the definition of Antifragility from Nassim Taleb. While a lot of people use the word, not many people know what it means and its implications.

Anti-fragility is the opposite of fragility, describing things that gain from chaos but may need to survive and flourish.

While resilience is great, it may not be our best goal. In this post we look at Nassim Nicholas Taleb's book, 'Antifragile.'

An antifragile way of life is all about finding a way to gain from the inevitable disorder of life. Here are ten principles that will help you live an antifragile life.

The definition of antifragile with examples.

We've reached a place in time where being resilient just isn't enough. What we need to do is to embrace an antifragile mindset.

Quantitative firm Bodhi Tree Asset advises buying fixed-income debt, gold and REITs.