Black Swans and White Knights
Let’s talk about Black Swan Events and White Knight Opportunities.
Ultimate crises scenarios = Black Swan Events.
If you’re unfamiliar with Nassim Nicholas Taleb, here is a quick explanation of Black Swan Theory:
The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology.
The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities).
The psychological biases that blind people, both individually and collectively, to uncertainty and to a rare event's massive role in historical affairs
Our current pandemic is perhaps the greatest Black Swan scenario in history. Certainly recent history.
Black Swan events produce carnage. There will be massive impact across the board economically, yes. We’re beginning to see it. Whiting Petroleum filed for bankruptcy yesterday. Some chefs in the hospitality industry are under the impression that up to 50% of restaurants will not reopen after our mandated quarantine period comes to an end. Major companies and industries as asking for more help as the $2 Trillion dollar stimulus package last week is not enough for them.
But there will also be White Knight opportunities. Let me explain:
Take a look at this market info from Ben Carlson (awealthofcommonsense). It highlights the performance of the Russel 2000 following terribly performing quarters (like the one we just had) since 1979.
Some companies are hiring hundreds of thousands of people (not just amazon):
Instacart is hiring 300,000 (yes, you read that correctly) full-service shoppers for grocery delivery
7-Eleven is looking to fill 20,000 positions
Dollar General is hiring 50,000 new works by end of April
Reality is changing right now, so they may look different then even a few weeks ago, but opportunities are hiding in plain site.
You might have to support your clientele differently. You might have to change your style of teaching or approach to interaction from in person to over video chat. You might have to optimize your online presence to boost overall company sales. You may have to switch industries or companies. You might have to completely shift your growth focus altogether. You might have to throw away your previous business plan or restructure the funding you thought you were going to receive from that angel investor.
But there is a white knight hidden in there, somewhere.
Find the White Knight!
Look for anomalies and capitalize where possible. People see your true colors in times of crisis.
As always, follow @itschriskeith on Twitter for more regular updates :)