The Upside & Downside of life 2020.

 

                                                   NEERAJ MAHAJAN

FRAGILITY

It is sensitivity to disorder, chaos. Fragile breaks down easily like a weak-willed/ bodied man, a porcelain cup. a mirror, a weak structure, or anything. The more complex a system, the more fragile it is. Human bodies, Government systems, Economic systems, airline industry, city traffic are very fragile. They are fraught with so much uncertainty that we shouldn't mess up with them. The worst is the bureaucracy that takes big decisions without skin in the game that transfers the tail risk ( an extremely rare risk of very high impact) to the public at large. A very contemporary anecdote is the Inundation of the Indian Stock market by free flowing trillions of dollars being printed by the Federal Reserve and the record-breaking indices. I bet when FED relents, millions of gullible Indians will lose their shirts in stock markets because poor India has sunk deep into recession coz of Lockdowns. Again, fragilizing government-induced Lockdowns in a complex economic system have rendered tens of millions jobless and killed thousands. Moral: Understand fragility and don't meddle without skin in the game.

ANTIFRAGILITY

The opposite of fragile is Antifragile. It simply means insensitivity to disorder, chaos. The great Taleb in Antifragile has detailed the concept impeccably well. If you have a small downside and unlimited upside, you are Antifragile. Be it small brief losses for a businessman or a weight trainer stressing muscles intermittently in the gym or a struggling author whose book is banned, all can benefit big time from uncertainty. The only precondition is their ability and willingness to endure small losses in the short to medium term. The big gains invariably follow.  If one is antifragile to something, one prefers it to be randomly distributed rather than being given slowly and steadily. Another example, our lungs. When the ventilator was introduced, it gave steady linear oxygen to patients' lungs and many of them died. When the realization dawned on doctors, it was modified to a non-linear function and the patients recovered. It is a favorable Asymmetry. Regular linear nutrition in modernity of as high as 6 meals a day is another example of killing with abundance. Intermittent fasting is the best tool to tap the antifragility of the human body.  Can you think of many more in real life? Antifragility is our natural state and can be reclaimed with intent if lost. 

OPTIONALITY

Google says The quality of being available to be chosen but not obligatory is Optionality. It is great in life and business but not in relationships coz it is nonobligatory. In the ancient Greek city of Miletus, the philosopher Thales demonstrated Optionality. By paying token advance on all Olive presses in the market, he controlled all of them. During the harvest season, the Olive crop turned out bumper creating an exponential rise in demand for Olive presses. He released the machine owners from their obligations and made big bucks in the bargain. He could have lost too in case of crop failure. Optionality is everywhere but to exploit it to your benefit, you have to be antifragile to small losses. It is a form of risk-taking that allows you to benefit from the positive side of uncertainty with a little concomitant damage. We only lose from Optionality if we pay way too much like buying in-the-money options. acting irrationally. 

OPTIONALITY = ANTIFRAGILITY + RATIONALITY

WITTGENSTEIN RULER

When a measuring tape is used to measure a wall, the wall may end up measuring a tape. Simply put, it means the wall is more trustworthy than the measuring tape. And the tape ends up exposing itself. Each day we come across situations where we are put to judgment and harsh criticism. These often end up revealing to you more about the low intellect of the critics rather than the subject( you). Deep down your skin if you are clear about what you want, ignore the popular opinion, the hoi polloi, and move on. Use Wittgenstein Ruler to measure them instead of being measured. As the great stoic EPICURUS said, if you live as per people's opinion, you will never ever be rich.

Many thanks for reading me. I shall continue in next blog

Photo credit: Kalei Peek on Unsplash.