Fiat Tires?

Before anyone gets carried away, the tire stuff will be almost entirely metaphorical. 

A while back I cited Saifedean Ammous, author of the books Bitcoin Standard and Fiat Standard, who Tweeted about fiat food. I thought it was a metaphor, I got a kick out of it and blogged about it. While it is at least in part a metaphor, it might be an actual thing, Ammous thinks so anyway. The basic idea on this is that when government (fiscal and monetary) policies inflate away our purchasing power they make whole, single ingredient foods like meat more expensive, too expensive for many people so they are replaced with unhealthier, processed foods that are cheaper in nominal terms, have much higher profit margins and makes us unhealthier. 

I don't know that I am on board with Ammous' conclusion about why our diets are terrible but either way our diets are terrible and all the carb-laden processed food we eat is making us weak, frail and sick. Cut carbs and eat meat is all I can offer there. 

We live up a steep dirt road that is very challenging when there is snow on the ground. Two wheel drive cars can't get 20 feet from the pavement without spinning out. Four wheel drive on the right, or wrong, combo of ice and other people having driven on it previously, might be insufficient. Going down hill in these conditions, it is easy to slip and slide. It gets more treacherous than makes intuitive sense. It's nothing like I grew up with back east.  

Where we live now, as compared to the other hill we lived on here from 1998-2012, is much worse. During our first winter on our current hill I had a lot of trouble sliding around in my Tundra. I remember in the middle of one slide it clicked in my head "I need different tires." I went in and got some very beefy tires from Cooper and when I needed tires again a couple of years ago, I got another set of the same Coopers. That picture is one of my tires. When I got the first set of these a buddy of mine who's only up here in the summers saw them and he said "holy shit!"

A few years ago when we bought the house next door and put it on Airbnb we tried to make the description of the road and it's challenges very plain in our listing and we reiterate the point in our welcome message. We're glad to drive anyone up who can't make it in the winter (the summer, anyone can make it up) but as you can imagine everyone wants to try and I don't blame them, I would too. 

Because the cabin is hard to find I meet everyone at the bottom of the hill and show them the way up. Part of the discussion about whether they will try or not includes me eyeballing their tires even though I don't tell them I'm doing that. The wrong type of tires, fiat tires maybe, versus the right type of tires can be the difference maker on our hill in the winter. The wrong type are "city tires," tires with much smaller, shallower tread patterns. The fiat tires have less optionality for where you can go because they have less functionality. I think that general idea can be applied to many aspects of life, it being easier to accept suboptimal choices or foods or recreational choices (sitting on a couch playing video games doesn't exactly promote health).

Admittedly, the analogy falls apart a little because four wheel drive with fiat tires and snow chains will make it up the hill just fine. 

Where I am using the word fiat as a substitute for suboptimal outcomes, the current event in the stock market is the type of trading that can cause panic. Was Monday a capitulation when the SPX was down 4% and now it will work higher? I have no idea but panicking is a fiat-like reaction. Markets panic but that doesn't mean you need to. Where fiat can be thought of as a consensus to be avoided, meaningful selling during this type of sell off by long term investors is fiat-ish. As @collaborativefund Tweeted today, "your lifetime investment returns are overwhelmingly determined by how you behave during brief moments of market craziness."