The Balancing Act
Achieving balance isn’t what most might think it is.
Naturally when we think about balance its someone who manages all areas of their life with some level of graceful ease and equity.
Balance can very well mean operating simultaneously at two extremes.
This year I’ve read and re-read Nassim Taleb’s book, Antifragile in bursts. The basic premise of the book is what things thrive as a result of shocks, volatility, mistakes, or failures and provides a guide on how we can all become more Antifragile. His simple test for Antifragility is If I have “nothing to lose” then it is all gain and I am antifragile.
Taleb provides us with many strategies for achieving antifragility, but one I highlighted and continued to come back to. The Barbell Strategy. He described the Barbell Strategy as a concept saying:
I initially used the image of the barbell to describe a dual attitude of playing it safe in some areas and taking a lot of small risks in others (open to positive Black Swans), hence achieving antifragility. Basically you avoid “medium” or “moderate” risk attitude entirely. But the barbell also results, because of its construction, in the reduction of downside risk — the elimination of the risk of ruin.
The Barbell Strategy may be best embodied by a man who lived nearly 2000 years ago.
The Life of Seneca
Seneca began his political career as a senator but fell out of favor with Emperor Caligula and narrowly escaped execution. Under Emperor Claudius, he was accused of adultery and exiled to Corsica for eight years, where he wrote extensively.
He was later recalled to Rome by Empress Agrippina to tutor her son, Nero. When Nero became emperor, Seneca served as his advisor, contributing to a period of good governance. However, as Nero grew more tyrannical, Seneca's influence declined. His involvement in the failed Pisonian Conspiracy led to his forced suicide in 65 CE, which he carried out in the Stoic tradition.
Seneca was a Barbell operator in more than one way. Firstly, stoicism as a practice is the domestication of emotions — being able to understand where you are and secondly, probably most importantly, he led a life of pure action, followed by pure reflection. He initially had a very active, adventurous life, followed by a philosophical withdrawal to write and meditate, rather than a “middle” combination of both.
Another good example of employing the barbell strategy is in personal finances:
If you put 90 percent of your funds in boring cash (assuming you are protected from inflation) and 10 percent in very risky, maximally risky, securities — like crypto, you cannot possibly lose more than 10 percent, while you are exposed to massive upside. Someone with 100 percent in so-called “medium” risk securities has a risk of total “ruin from the miscomputation of risks.
What Taleb believes is that this barbell technique remedies the problem that risks of how rare events are fragile to estimation error. By using the barbell we have a known maximum loss.
There are many modern day barbell practioners and it doesn’t matter which order you live in. Whether you go from theory to practice or practice to theory. In fact, a close friend of mine worked as a corporate banker in The City for 3 years before leaving to launch a travel and tourism agency in an emerging market. She left a pretty safe set up for something completely speculative and highly risky. This is a true barbell in every sense of the word because should the speculation fail or she can fall back on their previous profession — lucky for them it is doing pretty well. The aim of the barbell is to reduce the chance of the unacceptable to as close to zero as possible. So for her case, the chances of going broke due to having no other career options is pretty low.
Here’s a few more barbells:
Tom Brady — Arguably the greatest American Footballer of all time had a No Fructose Diet. Too much fructose can raise your risk of nonalcoholic fatty liver disease and Type 2 Diabetes. So he famously eliminated products with ingredients that list fructose from his diet.
Ed Thorp — American mathematician and professor, who taught the world how to count cards is a 92 year old who looks in his 60s has a list of unnecessary risks to avoid. One of which is travel. He found that probability of dying in a car accident as approximately 1 in 103, whereas the odds of perishing in a plane crash was 1 in 11,000. So he flies where possible.
Back to Balance
Taleb writes around the concept of The Barbell Strategy as a lever to domesticate risk — he’s basically asking himself the question, how can I make the uncertainty of everyday life work to my favour? His answer is to combine aggressiveness with paranoia — clip your downside, protect yourself from extreme harm, and let the upside, the take care of itself.
If that’s true for risk, what about the rest of our lives when it comes to balance? Perhaps balance is achieved by operating on two extremes — meaning going all in on a few things life, rather than juggling everything and ending up somewhere in the middle. Not too long ago I asked a friend, who is building a pretty cool startup how he manages to maintain a relationship despite working super long hours. He responded: Monday to Thursday, I work flat out and my girlfriend knows that, but early on when we were dating we agreed that each Friday will be our date night.
American Inventor, Edwin Land who is largely credited for inspiring Steve Jobs’ career said “If anything is worth doing, it’s worth doing to excess.” I’m not sure what you think but I take this to say, to avoid mediocrity in all your endeavours. Whether that be in business, in health or in love — the lesson of the barbell is whatever you do, don’t do it partially because average isn’t anything to aspire to.
Where in your life are you moderate where you could either be extreme or totally avoid?
