We expect the winter of 2022 to be freezing, and we must prepare in advance to survive it. Wise people prepare for unexpected disasters in advance.
There is a famous line in Game of Thrones: This generation grew up in the summer; they don’t know the cold of winter. The current energy crisis in Europe reminds us that this winter will be freezing. As ordinary people, we naturally cannot influence the world’s energy situation, so what can we do? That is to assume the worst and the best preparation.
Cold Winter and Asymmetry
If you’ve read Nassim Taleb’s Black Swan series of books, you’re familiar with the concept of asymmetry. The world is full of asymmetries. For example, let’s say you predict a freezing winter in 2022, so you buy drought-resistant down jackets, thick blankets, and many other products in advance. Let’s say you spend $2,000 on these things, and it’s not cold at all this winter. Let’s say the winter of 2022 is so warm that all the preparations seem pointless. So what is your maximum loss? No more than $2,000. After all, these things can come in handy even on a warm winter day.
But let’s blurt everything changes. Inflation continues to worsen, prices skyrocket, many places stop supplying heat at the coldest time of year, or the cost of heat is too high to afford. At this point, what you have prepared in advance may allow you and your family to survive a major climate catastrophe. How much is life worth? I think it’s priceless. That’s the asymmetry. The loss from a wrong prediction is limited, while the gain from a successful prediction is close to infinity.
The Chinese are always preparing for the future
The Chinese seem to be forever preparing for the future. There is a running joke in China.
A Chinese granny and an American granny meet in heaven. The Chinese granny said she had saved all her life and finally bought a house before she died. On the other hand, the American granny said that she had bought a house when she was young, had been paying the mortgage all her life, and finally paid it off before she died.
From this joke can also see the character of Chinese people. That is, they seek stability and are always preparing for the future. Because the Chinese fear going into debt, they must wait until they have full assurance before spending. The new generation of Chinese is not as conservative as their grandparents were, and those born after the 1990s enjoy spending early and taking out bank loans to buy houses. But no matter what, we need to know that the future is always uncertain, and the more prepared we are for it, the more likely we are to survive the risks of uncertainty.
In 2011, Mr. Ma Huateng (Pony Ma), the founder of China’s tech giant Tencent Holdings, asked Kevin Kelly, a famous American tech media personality, “Who is Tencent’s biggest enemy?” Kevin Kelly smiled and said, “That’s a billion-dollar question. The person who is about to destroy you has not been on your enemy list so far.” This quote also inspires us that the real risks often come from places we can’t see.
Will the winter of 2022 be freezing?
We will know the answer to this question this winter. :)
There is a joke in investment circles that a wise man successfully predicted 22 out of 10 crises. If you anticipate a freezing winter every year, sooner or later, you will succeed. So the point is not to predict but to be well prepared regardless of future events. Remember the asymmetry we discussed earlier? The loss of failure is limited, while the gain of success is infinite.
Although we don’t know the exact answer to this question, we’re preparing for winter in late summer and early fall. How about you? We’ve got a lot of new keep warm products on the shelves that you’ll use in the winter, as well as cozy stuffed animals, so now is the time to shop. When the snowstorm comes, it’s nice to think of lying on a warm couch and watching TV without any worries because you’ve prepared in advance. :)