Taleb describes antifragile as where one has favourable asymmetry where you have more upside than downside. Where one grows as a result of stress. Like the Hydra that grows two heads when one is chopped off.

As was witnessed in 2020, some businesses did better as a result of the COVID crisis. Acquisitive companies with ample cash will possibly see more targets, e-commerce companies are seeing a boost from the structural shift etc…

Naturally, I wanted to draw on how I could apply it to my own investing, daily activities and career. I’d scribbled marginalia notes in the book but I wasn’t fully grasping it. I needed to sit down and type out my thoughts.

To thrive from stress, one also needs to survive. So, the stress can’t be a terminal one. In the context of investing, it means I can’t get wiped to $0. Or even any kind of impairment of capital. I think I should set the bar high enough to ‘not lose money’ as Buffett says.

As regards to my career, I want to be able to be employed if needed. Since I’ve been employed as an accountant, consultant, investor and writer….my chances are pretty decent there. I’m sure having an accountant designation would be handy too.

Such experiences are the treasury bonds to my career. Taleb refers to examples of a portfolio that is 80-90% money market/treasury bonds and 10-20% venture investing. A barbell strategy where you don’t risk terminal loss but you risk a small amount for possibly unlimited upside.

There are many writers and inventors who had a two job strategy to their careers with a steady paying gov’t job in the day and tinkering at night. Kafka did that. Einstein did that. A part of me thinks maybe I should’ve done that. But, everyone’s case is unique and one’s own predisposition should be considered.

For me, it wouldn't have worked so well. I wasn't so good at hiding displeasure or pointing out the pointlessness of some work.

So maybe the career capital I have (which isn’t much... I’ve learned) might be just enough to keep me from terminal ruin. Which has been the logic behind this pursuit of designing a career of my dreams for the last 2-3 years. A part me thinks I’m insane for doing it and I’m sure my loved ones do too…thankfully they don’t say it to my face.

But yes, if it works, then well…what else could I hope for? It’s indeed a situation where there is nothing but upside. So, I think this pursuit of mine is situated to be antifragile for my career. Either way, success would mean I’m either an entrepreneur or I work with entrepreneurs.

Side note: There is a chance this is the first time you are reading about me…for context…I’m trying to build a career working with entrepreneurs to help them perform to their best and help them build utopian companies as a result.

Despite moments of feeling uneasy that I don’t know how things will work out and not having much of a paycheque for a few years, it seems to be an asymmetric bet even if my life only had 20 more years to live. It’s a better bet the longer I live.

Then what about applying it to what I do daily?

The barbell strategy does seem similar to the 80/20 principle where massive gains come from the “tail”. This would also support my rationale of wanting to focus on working with entrepreneurs. Not only do I find them fascinating as a group of individuals but it seems to be the best way to actually impact society (i.e. Bill Campbell). Most successful economies are built on the backs of entrepreneurs.

I guess the way I’d attribute the antifragile principles to what I do would be to knowingly have periods of intense focus doing the most important work. Instead of the classic grinding I did in my accounting days. Richard Koch called for the maximization of the 20% time that attributes to 80% of returns. But what if one spent 80% of the time focused on activities that would guarantee small wins instead?

While I would spend 20% of my time on the most important activities to design my dream career, the 80% is spent on maintaining and improving the system ever-so-slightly. I mean, even treasury bonds give interest payments (even if it’s practically 0% in today’s environment but in theory it’s a slow single-digit yield).

This means the 80% time would be focused on the slow growth activities that just require lots of time like strength training, reading, meditating, building relationships with my core friends etc…. All low-stress activities that will still lead to growth but that require a consistent effort but aren’t necessarily the activities that will produce some exponential return…though it may contribute to it in a weird way.

At least because going to the gym and reading requires no effort for me. Meditating and setting up a time to connect with friends requires a slight effort. Ah, and I can’t forget about my daily journals and reflective walks….they too are no effort activities that probably will provide yield. All activities to limit any kind of terminal ruin in my mental and physical health.

Knowing this….the big question is what do I focus on for the 20%? Ah well, that’s where I test a series of hypotheses and projects. Even if each hypothesis fails, I’ll still be moving forward to be healthy and wise.

Then what about investing?

Well, this is where doing nothing will be a big part. Naturally, because trading isn’t a particularly fun activity for me and not something I’d like to dedicate more time to. Though I admit I do feel the itch from time to time. But I need to remind myself every time I have the itch that I don't have the balls to trade.

Given the constraints I face, namely that I will primarily be investing in public equities..it helps narrow my options further. Another being I won’t be putting 80-90% into treasuries or money market funds as I do not have fuck you money. Hence, the focus for investing will have a tilt towards wealth accumulation, not preservation.

An 80% allocation in the S&P500 might provide possible downside protection. Yes, the market as a whole can come crashing down from some Black Swan event we can never know about. But in the current environment, investing in the index seems almost like owning a bond.

However, I like picking stocks and part of living is doing what I like. I also find it stupid for me to just buy the biggest 500 companies. It’s my own arrogance speaking. An arrogance and overconfidence that I can do better despite the stats. If I believed in the stats then I probably would’ve never left accounting anyway so…that’s the kind of person you are reading about here. Not much for stats.

At the current moment, I’d say I have ~80% in five of my best ideas. All leaders in their respective industries but each of them would need to be antifragile as a business. Another important factor is whether I have a margin of safety in the investment.

At the moment, I think I do but it’s something I’ll have to think through further on whether the business is really robust or antifragile. I’m also trying to consider how I would balance the growth focus I tend to have on my investments.

Some think growing companies are risky but I disagree. There are tradeoffs though, a simple one I see being people choosing fast-growing companies at any price. I think just owning some mix of FAAMG might be fine to make up the 80% for most individuals. But I don’t know enough about each to say anything that would constitute advice (i.e. it’s not advice).

This leaves the 20%. I’ve written about this before in length as the tail of fast-growing companies. Possibly a tail of 8-10 positions that could blow up or become massive. Not too dissimilar to the rule breaker companies David Gardner talks about.

A key for this 20%..almost VC-like.. allocation would require going in early… and having a major view about the future that the market isn’t fully aware of yet. These might be the ones where I’m purely betting on the entrepreneur because I just love the founder so much. I don’t want to be lazy about these investments though just because they won’t be large weights.

But this is the current idea I have for building an antifragile portfolio. I know, it’s not actually antifragile since when the stock market crashes everything correlates to 1 and all falls. Maybe I should learn more about Bitcoin.

However, for the time being, I would like to stick to what I’m curious on and that’s people. People running businesses and the weird organizations they create. I think I can make an antifragile portfolio just in that weird focus of mine. Time will tell I suppose.

Such is how I think I’ll apply Taleb’s frameworks to my career, activities and investing. As I finish my thought, I realize I’ve really just confirmed things I did and it even feels like I’m just patting myself on the back.

I hope this isn’t the case. Despite not making any major changes to what I’m doing right now, I feel I’m more aware of how what I do might be antifragile and how I can adjust it going forward.