Control or Chaos - The Warriors
The Contingency Plan
The first six articles in the Control and Chaos series listed five aspects of securities investing that you can control or manage: cash flow, calculated risks, contradictions, aspirations and reliable data. One of them discussed the ensuing chaos when all of those are ignored – and this brief essay will discuss the cause of that.
Essentially, the five principles of objective investing can be summarized as the justice of earned profit. Because voluntary production and trade are the hallmarks of a civilized and prosperous society, a decivilizing culture must be triggered by the desire for unearned wealth and power. But because evil is impotent in the face of reality, that cannot take hold without the faith and the force of self-sacrifice for an imaginary common good.
For a good summary of how this happens, consider the speech of the character Cyrus in the 1979 cult classic film, The Warriors:
The problem in the past has been the man turning us against one another. We have been unable to see the truth, because we have been fighting for ten square feet of ground, our turf, our little piece of turf. That's crap, brothers! The turf is ours by right, because it's our turn. All we have to do is keep up the general truce. We take over one borough at a time. Secure our territory... secure our turf... because it's all our turf!
Sound familiar? There’s one thing missing. To keep up the general truce there must be a scapegoat, a villain, a victim to demonize, an outcast tribe to make the weaker characters feel better about themselves. In the movie version, that gang was the Warriors – and their mission was to survive and escape to their safe haven of Coney Island. And how did they get into that mess? They had accepted the premise of “higher authority” – Cyrus, who turned out to be mortal.
The allegory of the Warriors also applies to individuals who must deal with the ethics of self-sacrifice and the politics of collectivism that permeate the most personal aspects of our lives – money and investing. More specifically, we must have a contingency plan for the potential chaos that maintains the power and wealth of the weaker characters. But not the plan mentioned in the previous article: “the pension fund manager has a fiduciary responsibility to anticipate that possibility and have a contingency plan that is not called a bailout.”
Your first fiduciary responsibility is to yourself and your young children. And the procedures for that begin with defined values, cash flow expectations, eliminating contradictions and the uncertainty of market performance. Only then can you define Plan B – and it ain’t Coney Island. To learn more, please click the link below:
https://www.amazon.com/Moneyball-Method-Middle-Class-Manifesto-Objective/dp/1696009111/