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Looks like yet another warning sign of dirty work afoot. Do you have a strategy to deal with economic black swan events? I'm looking for reasonable, affordabl

Looks like yet another warning sign of dirty work afoot. Do you have a strategy to deal with economic black swan events? I'm looking for reasonable, affordable measures that could shield my partner and myself should black swans ever strike. I'm NOT looking for alarmist prepper style rabid craziness...

ilaksh 7y ago
It's not going to be a black swan event. It's the long term debt cycle which is a clear pattern in historical data. See Ray Dalio's explanation. Preparing for the possible collapse of the financial system does not make you crazy. Ask people in Greece or Venezuela, or great grandparents who went through the depression. I think the first smart thing is to diversify investments such as buying gold or different currencies or real estate. I have lots of other idea but based on your comment you would accuse me of being insane if I mentioned them.
- ngold 7y ago
  Absolute worse case scenarios, some cash and gold and a title to a paid off property go a long way. Cash to pay property taxes for a couple years goes pretty far.
- markvdb 7y ago
  I'm sorry if I made you feel like I wouldn't welcome all well thought through input. That's certainly not the case. I love outside the box thinking!
Consultant32452 7y ago
I think the answer to strategies for black swan events is the same it always has been. Own a piece of land, some portion of your portfolio should probably be in gold/silver. You might toss in some crypto. Get/stay out of debt. Get a passport. Have enough savings so you can GTFO your country if necessary. Also, here's the math on catastrophic events. It's more likely than you think. https://medium.com/s/story/the-surprisingly-solid-mathematical-case-of-the-tin-foil-hat-gun-prepper-15fce7d10437 https://medium.com/s/story/the-surprisingly-solid-mathematic...
- novok 7y ago
  I call this upper class prepper-ism, and it has similar problems.
- AstralStorm 7y ago
  Actually in real hard black swan events debts are easy to escape... Land is also easy to take or can be worthless. What are you going to do with it, farm it? Live in the middle of nowhere with no amenities and no preparation? Assets are easy to steal, and are only useful short term, besides something like living space or private transportation to get away. Most useful are connections, as always. Then means of production, especially of necessities. And finally, just having the right kind of canny thinking. Something like BTC is even impossible to cash in without an internet, working like a glorified IOU.
linkregister 7y ago
I disagree with the other posters about buying real estate if you think it's the peak of the bubble. The price of real estate is strongly correlated to that of other assets, such as stock. Unlike stock, it can be illiquid in downturns. Undeveloped land is especially difficult to sell at market value even during good times.
- markvdb 7y ago
  I see your point. Hardly applicable in our case though. We bought a humble fixer upper countryside retreat with two hectares of productive farmland for under 10k€ in cash. A one time insurance premium really rather than an investment. Even if it generates some income beyond covering the recurring costs for real estate tax, electricity and maintenance.
- Gustomaximus 7y ago
  The difference to consider here is in 'crisis'. Banks can fold. Companies can and will go bankrupt. But land will be there. And it's not just about the crisis event, it's riding the bounce after. Sure you might buy at the peak today, but it will return to growth on the other side of the cycle plus have more security of most other assets. A friend of mind manges investments for high net worth individuals. I said once do they all come to you and look how big your past returns are? They said no, most come to them and say 'how can I make sure I'm never poor'.
  - AstralStorm 7y ago
    Depends on whether the crisis results in war or not. If it does, land is very hard to move or recover. See, it's almost 100 years past World War 2 and some property disputes are still alive... So it can be a part of a strategy but not whole of it. Especially any undeveloped land is extra problematic. (It will fall to whoever developed it by law most of the time, requiring a buy out at most.) And if the emergency is something requiring immediate liquid assets land is especially worthless. There are many such emergencies.
- imtringued 7y ago
  Yeah but the point is that you don't want to sell in downturns anyway. If you need emergency liquidity then focus on owning Bitcoin or gold.
voisin 7y ago
Put options on broad market ETFs or go long volatility ETFs.
- markvdb 7y ago
  2008-2009 was not totally black swan, but even then crazy things happened in the options market. An option is a contract. Counterparty insolvency, or in some other way allowed to not cough up. Both have happened under less extreme circumstances than a black swan. I'd rather avoid the counterparty risk.
  - profquail 7y ago
    If you’re in the US, the legal counterparty for any exchange-traded (or OTC-traded-but-exchange-reported) is the Options Clearing Corporation (OCC). The idea is that it’s a consortium of many exchanges and broker-dealers that can absorb any counterparty risk should the party who sold you can option contract become insolvent / unable to deliver. https://www.theocc.com/ https://www.theocc.com/ https://en.wikipedia.org/wiki/Options_Clearing_Corporation https://en.wikipedia.org/wiki/Options_Clearing_Corporation
tardo99 7y ago
Hold a substantial amount of cash in short-term Treasuries so you can buy in when things decline. You will know when to buy when Warren Buffett (or whoever replaces him when he dies) starts spending substantial amounts of his $120B cash pile.

ilaksh 7y ago

It's not going to be a black swan event. It's the long term debt cycle which is a clear pattern in historical data. See Ray Dalio's explanation. Preparing for the possible collapse of the financial system does not make you crazy. Ask people in Greece or Venezuela, or great grandparents who went through the depression. I think the first smart thing is to diversify investments such as buying gold or different currencies or real estate. I have lots of other idea but based on your comment you would accuse me of being insane if I mentioned them.

ngold 7y ago
Absolute worse case scenarios, some cash and gold and a title to a paid off property go a long way. Cash to pay property taxes for a couple years goes pretty far.
markvdb 7y ago
I'm sorry if I made you feel like I wouldn't welcome all well thought through input. That's certainly not the case. I love outside the box thinking!

Consultant32452 7y ago

I think the answer to strategies for black swan events is the same it always has been. Own a piece of land, some portion of your portfolio should probably be in gold/silver. You might toss in some crypto. Get/stay out of debt. Get a passport. Have enough savings so you can GTFO your country if necessary. Also, here's the math on catastrophic events. It's more likely than you think. https://medium.com/s/story/the-surprisingly-solid-mathematical-case-of-the-tin-foil-hat-gun-prepper-15fce7d10437 https://medium.com/s/story/the-surprisingly-solid-mathematic...

novok 7y ago
I call this upper class prepper-ism, and it has similar problems.
AstralStorm 7y ago
Actually in real hard black swan events debts are easy to escape... Land is also easy to take or can be worthless. What are you going to do with it, farm it? Live in the middle of nowhere with no amenities and no preparation? Assets are easy to steal, and are only useful short term, besides something like living space or private transportation to get away. Most useful are connections, as always. Then means of production, especially of necessities. And finally, just having the right kind of canny thinking. Something like BTC is even impossible to cash in without an internet, working like a glorified IOU.

linkregister 7y ago

I disagree with the other posters about buying real estate if you think it's the peak of the bubble. The price of real estate is strongly correlated to that of other assets, such as stock. Unlike stock, it can be illiquid in downturns. Undeveloped land is especially difficult to sell at market value even during good times.

markvdb 7y ago
I see your point. Hardly applicable in our case though. We bought a humble fixer upper countryside retreat with two hectares of productive farmland for under 10k€ in cash. A one time insurance premium really rather than an investment. Even if it generates some income beyond covering the recurring costs for real estate tax, electricity and maintenance.
Gustomaximus 7y ago
The difference to consider here is in 'crisis'. Banks can fold. Companies can and will go bankrupt. But land will be there. And it's not just about the crisis event, it's riding the bounce after. Sure you might buy at the peak today, but it will return to growth on the other side of the cycle plus have more security of most other assets. A friend of mind manges investments for high net worth individuals. I said once do they all come to you and look how big your past returns are? They said no, most come to them and say 'how can I make sure I'm never poor'.
- AstralStorm 7y ago
  Depends on whether the crisis results in war or not. If it does, land is very hard to move or recover. See, it's almost 100 years past World War 2 and some property disputes are still alive... So it can be a part of a strategy but not whole of it. Especially any undeveloped land is extra problematic. (It will fall to whoever developed it by law most of the time, requiring a buy out at most.) And if the emergency is something requiring immediate liquid assets land is especially worthless. There are many such emergencies.
imtringued 7y ago
Yeah but the point is that you don't want to sell in downturns anyway. If you need emergency liquidity then focus on owning Bitcoin or gold.

voisin 7y ago

Put options on broad market ETFs or go long volatility ETFs.

markvdb 7y ago
2008-2009 was not totally black swan, but even then crazy things happened in the options market. An option is a contract. Counterparty insolvency, or in some other way allowed to not cough up. Both have happened under less extreme circumstances than a black swan. I'd rather avoid the counterparty risk.
- profquail 7y ago
  If you’re in the US, the legal counterparty for any exchange-traded (or OTC-traded-but-exchange-reported) is the Options Clearing Corporation (OCC). The idea is that it’s a consortium of many exchanges and broker-dealers that can absorb any counterparty risk should the party who sold you can option contract become insolvent / unable to deliver. https://www.theocc.com/ https://www.theocc.com/ https://en.wikipedia.org/wiki/Options_Clearing_Corporation https://en.wikipedia.org/wiki/Options_Clearing_Corporation

tardo99 7y ago

Hold a substantial amount of cash in short-term Treasuries so you can buy in when things decline. You will know when to buy when Warren Buffett (or whoever replaces him when he dies) starts spending substantial amounts of his $120B cash pile.