Vulnerabilities Exposed!

A few months ago I mentioned my interest in learning about Doomer Optimism. The first impression I got from it was that it was about self-reliance and while that is part of the equation I think it is more accurate to think of it as being optimistic about what comes after the collapse of society and if I am right about that then it does not interest me anywhere near as much. I can't get to the point of thinking society will fall like Serbia 25 years ago or Venezuela more recently. 

The self-reliance part of it actually isn't quite right, more like a small, local community being self reliant together to emerge from the rubble. I had a quick, friendly exchange with one of these folks on Twitter who was talking about surviving a collapse, my response was "I don't think in terms of surviving collapses but resiliency in the face of prolonged distortions like the toilet paper/bottled water event of 2020 or one in the future that might last a little longer."

Similar to navigating stock market cycles, I am less concerned with what causes the "collapse" or less dramatically, causes the distortions as opposed to doing what I can to be as insulated as possible from the consequences of the event. As the Covid event was heading towards being declared a pandemic, I mentioned back then getting a couple of weeks ahead on things like meat, bottled water, dog food and the like. We get our paper goods from Costco, the quantities are huge so we just lucked out having enough of that to avoid ever running out. We also lucked out with hand sanitizer, I was in Sprouts early on a Saturday and they'd gotten a bunch in so I bought 100 of them...just kidding, I bought two that we're good sized and still haven't used them up.

The thought process was to assess the situation. Are people going to panic? What would create the biggest hassle for us? The word hassle is critical my thinking, I don't expect true catastrophe but it is easy to envision nuisance and hassle from having to wait in lines and the like. In taking steps to avoid hassle, we were probably also partially insulated if the distortions caused by the early supply chain issues ended up being a couple of orders of magnitude worse than they'd actually been. We had enough food we like and regularly eat to last for a bit and then had food we don't like that much or eat very often like soup and sardines. We had plenty of propane and solar power in case things got even worse. We have a huge propane tank not because we are worried about bad things but because the delivery guy can't reliably get to us in the winter so we avoid the hassle of running out. We have solar power and backup not because we are worried about bad things but because occasionally the power here goes out for a very long time and we avoid the hassle of a regular propane generator putting a serious dent in our propane supply.

If you've seen the news this week, you might have seen empty store shelves again. I don't know if that is weather related or actually supply chain related but it's not happening here...yet. Could there be another, Covid-related, nationwide food supply chain disruption again? Sure. It doesn't feel like we have great handle on things yet. We all see news that says Omicron doesn't attack the lungs, if that is true, then it is not clear to me why things are clamping down again but if they do clamp down again then it would make sense to once more get a few weeks in front of regular staples needs for anyone who has not already done so.

This is built on how little I know, not how much I know. I try to stay engaged but as a layperson I see results of studies that say completely the opposite things about every aspect of the management of the pandemic. You'll find plenty of content that shows that masks are very important and just as much content that says otherwise. Right or wrong, I believe that Vitamin D is important and taking steps to reverse metabolic syndrome (cut carbs, lift weights) can only help anything else you've done for yourself. Cleveland Clinic defines metabolic syndrome as having any three of the following five: waist greater than 40 inches, BP greater than 130/85, blood sugar greater than 100, triglycerides above 150 or HDL below 40.

Everything I've mentioned is consistent with my wanting to avoid adverse consequences if possible. Everyone's idea of adverse will be different, so if any of this resonates, then figure out what you don't want to have to deal with and do what you can to mitigate your hassles.

The investing parallel ties into sequence of return risk or people who are already retired and drawing from their portfolios. Someone with a million bucks in their account, taking $4000/mo, so more than 4%, would have a hassle if the market cratered and they hadn't set aside some reasonable number of months of income need aside so their lives won't be disrupted by a drawdown. Instead of cash, you could have some invested in products that either will go up when the market goes down or are designed to trade almost sideways with very limited volatility. It would be unfortunate to sell assets that are down 20-30%, even if that is just in lockstep with the broad market, to meet income needs.