There we go again.
It’s not going to leave us.
Nicholas Nassim Taleb has coined together what is possibly the market-word of the century.
We want to remain so.
We don’t wish to desert equity just because it is a fragile asset-class by itself.
We wish to make our equity-foray as antifragile as possible.
First-up, we need to understand, that when panic sets in, everything falls.
The fearful weak hand doesn’t differentiate between a gem and a donkey-stock. He or she just sells and sells alike.
Second-up, we need to comprehend that this is the age of shocks. There will be shocks. Shock after shock after shock. Such are the times. Please acknowledge this, and digest it.
To make our equity-play antifragile, we’ll need to incorporate solid strategies to account for above two facts.
We love moats, right?
We’ll keep our moats.
Just wait for moat-stocks to show value. Then, we’ll pick them up.
We go in during the aftermath of a shock. Otherwise, we don’t.
We go in with small quanta. Time after time after time.
We’re already sufficiently antifragile.
Just sheer common sense.
We’re still buying quality stocks.
We’re buying them when they’re not fragile, or lesser fragile.
We’re going in each time with minute quanta such that the absence of these quanta (after they’ve gone in) doesn’t alter our financial lives. We’re saving the rest of our pickled corpus for the next shock, after which the gem-stock will be yet lesser fragile.
Yes, we’re averaging down, only because we’re dealing with gems. We’ll never average down with donkey-stocks. We might trade these, averaging up. We won’t be investing in them.
Thus, we asymptotically approach antifragility in a gem-stock.
Over time, after many cycles, the antifragile bottom-level of the gem-stock should be moving significantly upwards.
Gem-stock upon gem-stock upon gem-stock.
We’re done already.