The ability to take risk is partly related to your ability to mitigate risk.
In this issue I’ll talk about risk taking as a function of preparation and framing. Originally I was going to title it “I’m a Prepper, He’s a Prepper,” referencing the silly Dr Pepper commercials but I figured it’s so dated it might not resonate any more.
One of the interview questions I often ask is for the candidate to tell me a story about something risky they once did. It usually leads down a rabbit hole of some important point in their life, and how they thought about the various risks of committing to a certain path. With hindsight, they can either amplify or deprecate the actual risks, which I often find illuminating.
At some level I do tend to think of risks in standard deviation space — what are the 1/2/3 standard deviation risks of any endeavor; what are the extreme left tail risks (more than three standard deviations to the negative side)? You don’t need the full situational radar of Jason Bourne, but some degree of awareness and forethought can be quite useful.
I’m not an end-of-the-world prepper, but I am a “unexpected things do happen with regular frequency” prepper. To my glass-half-empty mind, those that say “it should have only taken XX minutes” and then are shocked when, every once in a while, it takes far longer, should have their heads examined… I guess it goes back to my preference for low expectations as a survival method. I think there are two sides to prepping, one is the more obvious amassing of physical infrastructure and supplies, the second is the mindset to deal with scenarios which are far from ordinary life.
“Prepping,” in common parlance, seems to denote someone who is focused on gathering the material things that might be necessary in case of an Armageddon-like scenario, like a nuclear holocaust or needing to start an justified insurrection against the existing government. I’m not physically prepared for the extreme existential events, but I am largely insulated against regular disruptions (general supplies like food/water/energy, cash reserves, camping lights, batteries and large power banks, first aid kits); In LA, I have a go-bag with basic supplies, in case of an earthquake or other semi-expected crisis.
Initial stimulus
Having lived in Tokyo on and off for over two decades, serious earthquakes are a fact of life, and perhaps that explains my above average sensitivity to disaster preparation. When I bought an apartment in 2004, it had a storeroom large enough to accommodate a variety of supplies; Amazon Japan made it easy — people who were buying disaster goods were recommended a selection of things they might have missed.
By the time of the 2011 Fukushima earthquake, I had accumulated 15 cases of water; food and butane stores for about a month, and a pretty wide variety of disaster goods (there is an entire section at Tokyu Hands in Shibuya dedicated to disaster preparation). Food-wise, I had a lot of single serving rice packets (heat them in the microwave or in hot water), in addition to foil packets of all sorts of camping meals, for a total meal cost of about $4 (and which I often used to eat when I wanted a quick uncomplicated but tasty dinner).
The photo above is of a five foot crack in my bedroom wall caused by the Fukushima earthquake, the epicenter of which was more about 300 km away. I left it there for four years – I repaired it before I sold the apartment in 2015 – because it was a constant reminder of the risks of a natural disaster.
Mumbai 2000
I visited India for the first time in the middle of 2000 and I was in Mumbai during the beginning of the monsoon (my timing could have been better). It rained so much that it took 8 hours to get to the airport (the water was over the level of our exhaust pipes so we had to ask kids to push our van); no aircraft were flying in or out.
We had two invaluable aids at that time: cellphones (this was two decades ago so they were far from ubiquitous), and local currency. The cellphones enabled us to reach our Hong Kong assistants and get rooms at nearby hotels (and know which ones to target, since trial and error would have taken forever); the cash was useful for bribing kids to push our van. Having an extra cell phone battery (back when they were replaceable) was also quite useful. At one point we thought we might have to carry our luggage on our backs and wade through waist high water to the Léela Hotel — we felt quite like refugees. We eventually got enough help to push the van there, and before too long we were checked in and having beers in the bar, thankful for having made our tech-enabled escape.
Prepping to prep
I’ve read a variety of books on disaster preparedness, they have loosely informed my strategy but I have no illusions that they are in any way comprehensive. Similar to the lead graphic, the areas I want to cover are food/water/energy/light/ communications/currency — have the basic necessities, and give yourself a variety of ways out. While it makes sense to prepare for the more likely disaster scenarios, each disaster is different in its own way and so the optimal mix of supplies will be to hedge against a variety of likely disaster scenarios. Although I have a Ledger hard-wallet to carry around some cryptocurrency, I think hard USD cash or local currency will probably be more useful in a world where electronics and communications aren’t working (the electromagnetic pulse disaster scenario is really bad for crypto).
In Manila, I have stores of food and water which I rotate periodically — since there are frequent typhoons in the Philippines, there are plenty of disaster relief efforts to which to donate. The absolute cost of laying in some pasta and spaghetti sauce, Spam, cases of instant noodles etc is pretty small, and it’s two birds / one stone when I can donate the lot to a relief effort.
Property hedges
In many ways, my place in Manila is a bit of a hedge all on its own — because my other residences have been in the US and other developed countries, my Manila place is less correlated with the economic outcomes of the developed world. During the Lehman crisis in 2008, I found myself in Manila that weekend, where everyone seemed blissfully unaware of what was happening in the global financial markets. If things were to deteriorate rapidly in the US for some reason, I feel confident that I would be able to hang out in the Philippines while the developed powers dueled it out.
Similarly, I have a place in Hawaii which has been immensely useful during COVID, like many vacation homes. Until the pandemic, a vacation home was viewed as a nice-to-have but rather uneconomic (to say nothing of the operational expenses) — needless to say the views have changed, and so have the real estate values. I cannot take credit for foreseeing the pandemic, the house is kind of the family vacation home, but the larger lesson is that some diversity even in real estate can be quite useful.
Longer term: personal mobility
I am envious of those of you with German or Singaporean passports, which apparently allow the most visa free travel around the world. Even two different passports leaves you with many more longer term options than those of us with just one. In addition to my US passport, I wish I had one from the EU or UK like some people; it seems like quite a useful thing to have, not only for travel but also the ability to change residences with a minimum of hassle or pre-planning. I suppose that is more useful in more drastic disaster scenarios — like when a country collapses and creates millions of refugees — as a political pessimist, it does weigh on me more than most.
Weird prepper items
I thought I’d say a bit about a few of my prepper supplies; I’m always on the lookout for other useful items, so I’m open to suggestions. I’ll start from the common and progress to quirky.
Hat and sunglasses: in a go-bag, having a hat and sunglasses is useful since by definition you will be exposed to the elements if you are using the bag. A rain poncho or an emergency blanket could be useful as well, and don’t weigh much.
Butane stove: Iwasaki compact butane stoves are awesome for ensuring the ability to cook and heat water. Butane canisters are readily available. They’re also great for gas cooking (Asian cuisines!) when you only have electric/induction, or when you want to cook outdoors or on a table (shabu-shabu!).
Backup generator (propane-powered): given the number of blackouts in the US, which could get progressively worse if global warming puts more stress on power grids, having a backup generator is advisable, but good luck getting one from Costco when there’s a hurricane bearing down on your area. I have one which uses propane tanks as well as gasoline, because it’s easier to source, transport, and store propane.
Second cellphone: This is kind of a no-brainer, because our primary cellphone is such a critical device (even if we misplace it a lot). Having a secondary connected device with personal data redundancy is very useful for when you stupidly leave your primary in an Emirates lounge for instance, or you want to contact your primary device. They’re not expensive, and I use my secondary as my Google Fi global roaming device ($10/Gb high speed data for nearly the whole world; no more SIM card switching!). Also useful when your primary phone is charging, or out of power.
Stanley FatMax Fubar III: This is really an earthquake tool. I decided that if my old building collapsed on me, I’d need some kind of tool which is appropriate for the job — no household items (a hammer? a tennis racquet?) seemed like they would be very useful. This is about $100 and is primarily used to demolish interiors, so if I ever encounter any rubble, this will be my weapon of choice, either to help me exit, or aid other people in need. Also, carrying this around after an earthquake will have people think twice about assaulting you.
Iridium satellite phone: I bought a satphone because it would be useful if I ever stray far from the beaten path, or if a cyber attack wipes out landline and cell service. Typically disaster areas have little or no connectivity, so having a sat phone would be priceless in that left tail scenario. SpaceX’s Starlink (low earth orbit satellite Internet) is becoming increasingly mobile but it’s far from portable. At some point I can imagine a SpaceX satphone with true global Internet roaming, and I’ll probably get one of those.
Bicycle or e-bike: many years ago, I received intelligence that the Iranians were threatening to mine the Straits of Hormuz, through which most of the world’s oil passes. In that scenario, which fortunately has not yet come to pass, not only would oil prices skyrocket, gasoline supplies would probably be heavily rationed. In that scenario, a bike would be an invaluable way to get around. But get a heavy duty lock.
Managing logistics risk
There is a risk attitude towards logistics as well — which is probably related to general risk management but with acquired parameters related to punctuality (which is both a social and personal function). One common logistics risk is transit to an airport.
I remember having drinks with a work colleague who boasted that he made his (Asia regional) flight despite arriving at the airport just 30 minutes before departure — which he was quite proud of — I told him he was a moron, because it was the last flight of the day, and he was traveling for work — so the repercussions of missing that flight would not have been trivial. I used to have a boss who prided himself on minimizing airport time — essentially he was working within a one-standard deviation framework, which, in a place like Tokyo, makes more sense than somewhere like New York.
It reminded me of one of my favorite Jared Diamond stories from The World Until Yesterday: What we can learn from Traditional Societies — he was in New Guinea in the forest with an indigenous tribe, and selected a seemingly idyllic place to camp for the night. But the natives refused to sleep in this space because the tall tree shading the area was dead. Jared Diamond thought they were excessively paranoid (because the tree was unlikely to fall that specific night), until he realized they camp outdoors 100 days a year, and they have heard countless stories of people dying because of dead tree falls — so he called them “constructively paranoid” (a good thing).
The asymmetrical consequences of having missed flights do not make up for the small victories of making a flight, especially since cutting it close invariably induces a level of unwelcome stress no matter what the outcome, and knowing that there is a chance you might have to do the OJ Simpson in the airport thing, which tends to be more humiliating than exhilarating. This is a variable outcome game where the bad results are larger than the good results.
Nowadays, airports can be reasonably productive places (depending on the airport, of course), given free wifi and lounges. In the days when airports were primarily just waiting rooms, there was more of a penalty for arriving early, but nowadays they tend to be both diverting and productive (OK, Kuwait is a glaring exception!). Most often the question is whether I would be better at the airport or in the hotel room; most of the time the airport is the winner. As an aside, I dislike the European custom of announcing gates just before boarding — I understand that it balances out waiting areas but it definitely stimulates a bovine sentiment as everyone rushes to the gate when it is announced. The alternative is to have more space in the first place.
Since I have probably averaged 70 flights annually for 30 years, that’s 2100 flights. If airport transit times were normally distributed, then I would have missed 48 flights if I assumed a two standard deviation transit cushion, and still would have missed 3 flights using a three standard deviation cushion. For the record, I missed only one flight where the dependent variable was the time to leave; it had marginal consequences because it was a Saõ Paulo - Rio shuttle. I have missed a few flights due to other factors (primarily sleeping through alarms, so now I often set two when I’m tired).
Of course the standard deviation of transit time is not known a priori — looking at downtown Manhattan to JFK looks like 45 min in the best case to 90 min or more in the worst case, but the mean transit time is probably closer to 1 hour. Come to think of it, Uber/Lyft/Waze certainly have both the mean and standard deviation numbers, especially broken down by day of the week and time of day — but most people probably don’t think in this manner.
The other issue is that transit times are not normally distributed; human error and the weather account for most of the delays, which can be considerable; on the positive side, physics limits how fast we can get anywhere. I’m sure there have been many more 2 hour trips to JFK than there have been 30 min trips.
Some travel (risk) hacks
Minor hacks I have come up with to make travel more enjoyable and less stressful.
Wallet switching: I have different wallets for countries I visit frequently, containing local currency, transit cards, IDs, credit cards, keys etc. When I arrive, I rebalance the wallet so I have only the items I need, so if I ever misplace or get my wallet stolen, I won’t have to replace a variety of non-relevant cards (like a US driver’s license).
Amenity kit: This is a minor issue but something which gives me a kick: on long distance flights, don’t rely on the airline amenity kit (if you’re flying business) with mostly useless items — pack your own kit! You already know which items you find useful, so take one of their bags and populate it with your favorite things/brands (in mine: moisturizer, eye mask, lip balm, earplugs, electrolyte tablets, cologne atomizer, Sharpie, dental picks, disposable travel toothbrush, mints, hand sanitizer). I usually travel with an inflatable pillow (lumbar support) and a light blanket.
Premium luggage on sale: My checked luggage is from Tumi, a brand I used to love but which has become overpriced. So when Tumi has deeply discounted sales on weird colors, it’s kind of a win/win: the luggage is durable, and the weird color makes identifying your bag very easy (and obviates other people taking your bag by mistake). Put on a cheap luggage tag to doubly ensure no one mistakes your bag for theirs. Lighter colors rapidly get a beaten up quality, further reducing the attraction of theft. Not the strategy for people who care deeply about what their luggage says about them.
Final thoughts
Whether it’s disasters or airport transit, I like the idea of constructive paranoia, but it is ultimately a personal preference. Others base their expectations on the mean, and are both surprised and annoyed when things don’t go to plan. Left tail outcomes are a fact of life (especially in European airports this summer); how you deal with these situations is a function both of your preparation as well as your framing of the situation.