By Sean Kelly
Last year at this time we took a look back at the conditions of Thanksgiving ten years earlier. Our intent was to count our blessings for the boom times of 2019, when we were in the longest economic expansion in US history, comparing it with the conditions of 2009 when we were still reeling from the bursting of the housing bubble.
As we celebrated good times in 2019 little did any of us suspect the improbable pandemic that would strike just a few months later.
It reminds us of Nassim Nicholas Taleb’s important 2007 book The Black Swan. Its subtitle is The Impact of the Highly Improbable. It is a book born out of the author’s impatience with mathematically neat, but contrived models of financial risk management. These defective models created exposure to portfolio losses in the housing bubble and mortgage meltdown far beyond what were envisioned.
The Thanksgiving connection comes from the tale of the turkey that Taleb tells:
Consider a turkey that is fed every day. Every single feeding will firm up the bird’s belief that it is the general rule of life to be fed every day by friendly members of the human race “looking out for its best interests,” as a politician would say.
On the afternoon of the Wednesday before Thanksgiving, something unexpected will happen to the turkey. It will incur a revision of belief….
Consider that the turkey’s experience may have, rather than no value, a negative value. It learned from observation, as we all are advised to do. Its confidence increased as the number of friendly feedings grew, and it felt increasingly safe even though the slaughter was more and more imminent. Consider that the feeling of safety reached its maximum when the risk was at the highest…
Taleb’s thesis is that history’s most consequential events are the result of the unexpected. And that this is so common in financial markets, that by now we should have come to expect the unexpected.
Or at least be prepared for the unexpected.
At Red Rock Secured, our priority is helping people protect their wealth and their retirement from unexpected events. Events like the popping of financial bubbles and monetary crises. As people have discovered throughout the centuries, the best way to do that is by owning precious metals, the enduring money of the ages.
As we wrote last year, “A look back at Thanksgiving during the dark days of the downturn, is a timely reminder to celebrate the good times, prepare for the bad times, and hold tight to those things what never waiver, weaken or fall away — like family, the blessing of good food, the joy of good company, and the strength of the American spirit.”
Best wishes from all of us at Red Rock Secured!