Showing posts with label Survival. Show all posts
Showing posts with label Survival. Show all posts

Monday, March 14, 2022

Survival of the Flexible

Many of us like to think that there is our own version of something controlling everything, and that allows us to find comfort. I moved away from being religious, but I still had the idea that there was a bias to good. That gave me comfort partly because of the possibility that you can control stuff. 

Gradually, I started to get more comfort than that, from the idea of randomness. The simple driver that stuff happens because stuff happens. 

There are different types of randomness. Part of the complexity depends on the constraints. When you roll a dice, there are only 6 possible outcomes. For a coin, it is two. The Rubik’s cube is incredibly complex, with 43 quintillion (18 zeros) combinations. That is a finite... but mindbogglingly large number. By adding a layer of pattern recognition, you can still learn to create a sense of control. 

Another level of randomness is simply a pulse. The mere existence of life and change. It does not have to have intent other than a will to survive. To cope with change. That does not require insight into the future. If you have sufficient biodiversity, you can cope with most changes in an evolutionary sense. 

You just don’t know which of the survivors will be the strongest in hindsight. That depends on what happens. Even if you see the result, and played again, a different scenario would unfold. That is complexity that responds to flexibility rather than control. Reacting and adjusting. Survival of the flexible. 

Create excess control and single solutions create the unintended consequences of mono-culture. Where we do not know that what we are doing is horribly wrong, until it is too late.



Tuesday, September 15, 2020

Surviving the Stages

Few businesses plan to die (although most new businesses do). In that way, legal people (a company has legal rights and is subject to obligations) have the ultimate advantage over real people. Given that the most powerful investment tool is time, even modest real returns will compound into the gargantuan with a long enough time frame. The key is survival, even if the nature of the business changes dramatically. Nokia was founded as a pulp mill. Berkshire Hathaway (Warren Buffett’s Engine) started as a textile factory. Wells Fargo, the bank, started life along with American Express carrying deliveries in Stage Coaches. The two key elements besides what they do, that most real people tend not to think about, that are essential for the survival of legal people are (1) Capital, and (2) The Container. A good business is not a good business if it can’t survive. It doesn’t matter how good the idea, if it can’t pay its bills when they come due, or survive periods of disruption and destruction. If you want to build wealth, the key ingredient is capacity for time.




Friday, March 27, 2020

Survival Models


The first course I had to repeat because of failure was ironically called Survival Models. It was a step up from the course’s previous name. Mortality. If you have ever experienced the pain of finishing an essay or project, and the computer crashing, you will have some empathy for the penny that dropped for me. I hadn’t failed for lack of application. I had passed the course, but had been swallowed whole (along with most of my class) by the final exam. The exam was all that mattered for the professional qualification. Even when the evidence disappears, Skills & Knowledge built through blood, sweat and tears leave a mark. The second mouse gets the cheese. Second time round, a lot of concepts that didn’t make sense the first time sunk in. Normally we don’t have time for that. The production line moves on with progressively weaker foundations. I still look back at that course as a blessing (deep) in disguise. I learnt the value of learning through teaching people one step behind, even when you are grasping in the dark. I learnt the value of compounded learning. Of inconspicuous growth. It’s never starting from scratch if you carry hard won lessons with you.



Thursday, March 19, 2020

Firm Foundation


Businesses can live hand-to-mouth in the same way as people do. Pay-check to pay-check. They can require things to run smoothly in order to keep going. Like people can live conspicuously fancy lives, but be scurrying behind the scenes to maintain the illusion. Superficially successful companies can be over-reliant on good times. Money from the customers immediately being used to pay staff and suppliers as the show must go on. A person having an Engine or Capital to sustain an income if they can’t work, is similar to a business having Capital Reserves to eat into when times are tough. There are plenty of Investing Rule Number Ones to go around. My favourite is “Never be a forced Seller. Never be a forced Buyer”. But the real first goal is survival. Survival is the force behind decisions we don’t want to make, but make anyway. Having a buffer to get you through periods when that thing you do can’t be done. Whatever your purpose is, whatever meaning you want to create, whatever you want to be… it all comes down to the strength of the foundation. It’s all about the Base.


pic: www.benmolyneux.co.uk