our recent post to subscribers:
The war in the middle east has opened a pandora’s box. Even if the war ends tomorrow, the rules of the game have changed
There were several red lines in the conflict, which have been crossed. The elimination of the leadership in Iran, direct attacks on the other countries in the gulf and now the closure of the strait of Hormuz. This means that we can expect higher risks and volatility in the future
We have no geo-political expertise to know how this will play.
Our approach to the risk and uncertainty in life at the micro and macro level has always been the same – build resilience
Invert the problem
How does one get impacted by the smallest of problems? Let’s invert the problem and the answer is quite simple
Have a high-cost lifestyle with no financial buffer, bad health and poor relationships
Any combination of the three will lead to fragility at the personal level and result in bad decisions. We cannot control the macro but can influence our personal situation. We have agency over it
Build resilience
Our suggestion is to follow the old fashioned virtues – have financial cushion, avoid debt, take care of your health and have good relationships
Take care of the above and you will have the fortitude to weather the turbulence with ease. If you have a large cushion, you may even be able to turn it to your benefit.
We have always been over-cautious in our approach to investing and have maintained a larger than necessary cash buffer. We plan to deploy it over the coming months as prices get attractive
If you have any questions or concerns, write to us. We will collate all of them and respond via a common post
