Nassim Taleb is a prolific thinker, writer, and former options trader. Most places on the internet will document his rise to prominence around 2008 financial crisis. Nassim Taleb wrote two famed books: Fooled by Randomness, and The Black Swan, before the Great Financial Crisis. In fact, when I found Talebs work it was do to interviews I found on YouTube. He was one of the few people who had documented warnings of an impending financial crisis, and he appeared to have a strong understanding of our financial problems.
Fast forward to late 2018 and early 2019. I began re-reading and listening to Fooled By Randomness, and Talebs more recent book Antifragile. In Antifragile, Taleb discusses how people can benefit from disorder and crisis. Generally, Taleb talks about these things in terms of trading in the financial markets. However, he also mentioned how a person with stores of extra supplies could find themselves anti-fragile during a crisis. For example, if someone stores certain types of commodities or resources for a rainy day, not only will that person have extra supply for themselves, but they could might sell extra supply for a profit and make money during a crisis, this is anti-fragility. After reading Antifragile, I tried thinking of various products I could sell, or businesses I could start, to take advantage of disorder, but I did not come to any actionable conclusion. I had already started importing and selling some small fitness products online, so I resigned myself to that activity, thinking my dreams of anti-fragility would have to wait.
As time passed I found my ability to compete by importing and selling products was diminishing. I was not buying enough inventory to lower my costs, and my competitors were in the no-skin-in-the-game business of “drop-shipping”. As a result of my higher prices, I ended up holding one third of my inventory from early 2019 until this year(2020). However something unexpectedly changed. As the CCP virus spread and many aspects of the economy shut down, I began to see the demand for my leftover inventory sky rocket! One year ago I was lucky give away my extra inventory at a minor loss, now I am getting messages everyday from people on Facebook and e-commerce sites who want to buy immediately. Simultaneously, the bullshit artists who do drop-shipping for their entire business model have found the cost of shipping from China drastically higher, and factory lead times much longer. Thus I havefound myself in an anti-fragile situation. Not only did I have extra inventory for myself, but I actually benefited from selling inventory into the crisis.
I did not expect to benefit in any way from the pandemic. However, my online selling strategy is the opposite of fragile model that many “drop-shippers” use. Since I only sold inventory I owned, and I never borrowed money to buy inventory, I never ran the risk over extending myself. And my selling reputation is untarnished, because I did not sell people goods that could never be delivered. On the other hand, online sellers dependent on “efficient” supply chains from China found themselves fragile, and must deal with the consequences.
The lesson : buy Antifragile by Nassim Taleb and learn how to think in a world of extreme complexity, you might accidentally benefit from the next crisis.