I don’t know when this recession will end, and I’m not interested in your forecast.
But I am interested in the historical observation that progress happens too slowly for people to notice but setbacks happen too quickly to ignore, which causes most people to recognize when a recession ended only with considerable hindsight, which requires maintaining investing optimism even when the economy around you feels broken.
Do we know more about what’s going to happen in the next 12 months today than we did in January?
You’d think so. We now know there’s a pandemic that shut the economy down. We didn’t know that in January.
But remember what Daniel Kahneman says. “The correct lesson to learn from surprises is that the world is surprising.”
The things we thought about the world in January now look obvious. But what does that tell us about our view of the world today?
Couldn’t the world change in as surprising a way between April and June as it did from January to March?
Of course it could. That should be the main takeaway of 2020.
We’ve learned this year that assumptions you have about the future can be destroyed overnight. That’s true for the poorest to the most successful, the old dry cleaner to the tech startup.
It was true in January, and it’ll be true again in the future. Things change.
If that’s the lesson, the question is: what do you do about it?
How do you think about a world where fundamental assumptions about the future are so fragile?
“Humbly and with fingers crossed” is the answer.
But two other ideas:
Here’s a useful expectation: assume the world will break once or twice per decade. I don’t know where, or when, or how, who it will affect.
But when you expect the world to break every once in a while you prepare for events you can’t foresee and you don’t have to rewrite your playbook when they happen.
You’ll prefer big cushions and room for error.
When people ask, “What are you preparing for?” you’ll say, “A world that history shows is both a growth machine and a continuous chain of unforeseen agony.”
A world where we have no idea what will happen next.
Nothing more specific.
*Featured post photo by Andre Guerra on Unsplash