Conversation

Weird how when I model risks in the world, I'm like zombies, asteroids, pandemics, climate apocalypse, grimdark only war... but when I model personal lifestyle risk, I'm like inflation, savings level/rate, NPV of future income, portfolio return rate... 🧐
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How do you connect up the former kind of model to latter kind of model...? What is the inflation impact of zombies?
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Kidding aside, there's a real gap here. Typically, the reinsurance sector is the main bridge between dramatic, discontinuous scenario-shift risks and quantitative, continuous in-scenario risks. So for eg. now reinsurance are starting to ditch fossil fuels
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In-scenario risk mitigation is mainly about managing financial assets. Out-of-scenario risk mitigation is mainly material assets, relationship assets, and capability assets, in that order.
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If the world gets slightly bad, you need money. If it gets very bad, you need stuff more than money. If it gets really bad, you need relationships more than stuff. If it gets really, really bad, you need capabilities like zombie killing. If it gets worse than that you die.
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This is not a bad way to model risk regimes actually, based on the primary asset of value. Money regimes, stuff regimes, people regimes, skill regimes. You assign probabilities to scenarios in each, and allocate your risk management efforts across those 4 asset classes.
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For eg if you think there are no slightly bad futures, and it's all very bad or worse, you should ditch all financial assets and invest in material stuff, relationships, and skills. Basically retreat to a an off-grid commune.
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Replying to
This is like what preppers do, no? Except they mostly seem to neglect the relationship parts, and somewhat misguided on the skills parts
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