My Black Swan

I bought a farm.

I bought a farm located in an area that receives about 18 inches of rain per year.

The year that I bought the farm we received about 1 inch of rain.

A neighbor of mine who had lived in the area for over 80 years told me this was the driest year he had ever seen.

This was my black swan.

I was highly leveraged and in no financial shape to with stand such a shock.

Through sheer idiotic stubbornness (working 10 hours a day 7 days a week off the farm) I survived the event and did wind up selling the farm for a profit 10 years later.

But I was never the same person after that.

I have seen two oil / real estate bubbles rise and fall in Alberta.

I have seen a technology bubble rise and fall.

I have seen the 1987 black Monday stock market meltdown.

I have seen the 2008 stock market collapse.

I have seen crude oil fluctuate between $3 and $147 dollars per barrel.

I have seen interest rates fluctuate between 21% and 2.00%.

I'm 45 years old.

Hopefully I'm only half way gone.

I wonder what the next 45 years will bring.

How do I protect my family from future rare events?

Number one, I disagree with Taleb on these rare events.

I don't think they are all that rare.

Number two, I agree with Taleb that the best way to protect oneself is to stay, or get, deleveraged.

Number three, I must own assets that can survive "rare events".

Assets such as cash, gold, land, and companies.

The companies that I own must live with the same leverage principals that I live with.

With all this in place I still may not be properly prepared.

Why?

Because the real black swan is the one you have never seen before, the one that no one has seen.

I guess for that there is no preparation.