Your stockbrokers will say buy a hot new tech stock. Gold bugs will have you buy gold. “Buy a second / vacation / investment home” implores the National Association of Realtors. Goldman Sachs has a nice mortgage backed security for your fund.
Sometimes, it feels as if the aliens from “Mars Attacks!” are running around our neighborhoods with those chest mounted translators blaring; but instead of declaring “We come in peace!” while vaporizing people, they are running around bleating “Your money is safe with us!” while vaporizing our money.
Barbell investing, while not a new idea, was massively popularized by Nicholas Nassim Taleb in his book The Black Swan, published in 2007. In this black swan world, risk is not as quantifiable as many standard economics textbooks lead you to believe; in fact, it may be incalculable. To protect your investments from uncertainty, Taleb suggests combining a hyperconservative and hyperspeculative approach could be the answer. By placing 85-90 percent of your investments into XTREMELY safe investments, and the remaining in highly speculative, leveraged if possible, venture-capital style investments, you protect yourself from unknown dangers while attempting to profit from successful speculation. Alternately, one could invest everything in speculative investments, while insuring against losses of more than 15 percent, achieving the same level of risk control.
If these risks apply to our investments, surely they apply to world events at all scales. These surprises, the beasts rising from the unknown unknowns, are everywhere. Here be the dragons, indeed, and they are with us daily in boardrooms and bedrooms, in government and non-profits, online and offline. And certainly inside of us.
Taleb’s book and a few (!) others, blessedly strange parents and a permanently unsettled mind leads me to seek these creatures, a crytozoologist of novel ideas. One way to get at these truths is to tell stories and jokes in the media you know best. Bang your head against the wall of some new oddity. Perhaps you embarrass yourself a bit with your ignorance. Learn you will, though, and splendid discoveries will appear along the way. Sit back, hopefully learn, and enjoy this exploration of economic and other curiosities and ephemera.