#63 Uncertainty is certain

Good evening all, and a happy Sunday from the BA business lounge at London Heathrow Airport.

There is a lot of talk about uncertainty at present.

2024 brings with it the potential of lots of it. There will be important elections across much of the world, affecting over half the world’s population. A lot is happening in the realm of geopolitics.

But has the world become more uncertain?

When something unexpected happens - such as a global pandemic which affects every corner of the globe - there is much talk about elevated uncertainty.

But unexpected events don’t necessarily mean that the world has become more uncertain. It just means that an event occurred that we didn’t prepare for, so people are taken by surprise.

What is certain, however, is that every year, events will occur which will continue to take us by surprise.

For example, many of us working in big corporate companies will be used to surprise personnel changes, leading to significant organisational changes happening regularly.

Is there anything we can do to prepare for the unexpected, at least in our personal lives?

In the absence of a crystal ball, and with the humility to recognise that forecasting is a difficult sport, we can build contingency across the key areas of our lives.

This means that whilst we may still be blindsided by something, we have things in place to cushion their overall impact.

Here are a few examples:

• Having a rainy day fund in case of unexpected outlays

• Having fallback career ideas in case of

  being made redundant

• Having private health insurance in case of significant health complications

Implementation idea

Conduct an audit of your life and think about the possible categories of events that could have disruptive effects. Consider whether there are steps you can take today to limit their impact when they materialise.

Sadly, good things don’t always last forever. We know this about many aspects of our lives, but we can be tempted to hope for the best and not prepare adequately for them. Preparing for bad things is not fun, but our future selves will thank us.

Best, Alex Joshi.

On my bedside table:

• Non-fiction: The Intelligent Investor by Benjamin Graham (link)

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