20th and 21st Century combined has seen the kind of progress that a human being in the 19th century could not have even imagined.
However, life was not always easy for the generations that experienced 19th and early part of 20th century.
Let me illustrate with some examples:
Famines
Just a 50-year period between 1850-1899 saw 24 major famines in India leading to millions of people losing their lives.
Last major famine in India happened in 1944.
Food Scarcity
Droughts, dependence on monsoon, small land holdings, low yields and lack of finances meant India experience continuous food scarcity till the green revolution was initiated.
Proportion of population reporting hunger reduced from 16% in 1983 to 1.9% in 2006.
Mobility
Train and waterways takings weeks/months of travel were the most used means of mobility.
United States had like 10 miles of motorable road in 1900.
There was no air travel.
Personal vehicles for mobility were in nascent stage with the first car having been manufactured in 1886.
Entertainment
Theatre troupes, ventriloquists, hypnotists, poets, comedians, choirs and orchestras were the main source of entertaining in 1900s.
First movie ever produced was in 1881 and it was a 2.11 second film reel.
Epidemics
Epidemics were a part of life for the 19th and even a large part of 20th century.
In fact, in book Guns, Germs and Steel, author Jared Diamond details, how germs carried by those looking for new territories led to huge number of deaths in the Asian world from North America, Africa to Australia.
Polio was eradicated in 2000 while for malaria the date is set for 2050.
However modern medicine has made so much progress that disease like malaria, TB, Polio. HIV and even common cold that were once life threatening do not capture public imagination anymore.
Short-Term Memory
The oldest perhaps bad habit of human beings is perhaps forgetting what brought us where we are.
The whole progress is taken for granted to the extent that they are not in the vicinity of our thoughts leave alone doing something to prepare for the shocks.
This memory failure can be seen as the genesis of how “Fat Tail risks” have the ability to jolt us into a shock.
When you read the above, it all seems familiar but is it upfront and center for you when you look at your life/business/career etc.,
Covid was that jolt.
Everything that we take for granted has been brought into questioning by this epidemic that has impacted the whole world causing millions to fall sick and so many lives being lost.
If history teaches us any one thing it is that more things change the more, they remain same.
Humans might be the most dominant race on earth, but it has not conquered the world.
Nature is more powerful.
We have always been successful in meeting the challenges of nature.
However, CORONA has taught us that if we are not pro-active what happened centuries back can happen again.
We can save ourselves from nuclear holocaust because activation is in our hands, but can we save ourselves from the attack of the nature or how nature will react to our treatment of it.
Ultimately it all boils down to our preparedness for fat tails and not just our reactions.
Because if the focus is on reactions damage will happen before we control.
And this applies as much to our personel lives as to global problems.
Not every “Risk” can be anticipated and that’s why you try to remove fragilities from your system as far as possible.
During the Middle Ages when war was “par for the course”, kings will build trenches around their forts/cities and generally try to make it difficult for the attacker to reach inside the fort/city.
The idea is to give yourself a chance to fight for another day.
Whether it is an epidemic, your career or your investments, stop anticipating all the risks.
Focus on creating a strategy that has a natural immunity and can give you another chance to fight it out.
For guidance contact manish.verma@manishverma.co.in or +919920741569
Follow my twitter handle irreverentinvestor@manver1974
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