What’s Up Wednesday #15 - A crazy story of the past, Three sides of risk
I hope you all are in good health! Last month a friend told me a story about one of his best friends and I want to re-tell it to you.
A story of the past
John grew up in the soviet Tschechoslowakia in the 50s. His dream was to escape the Soviet regime and go to America. In his 20s he managed to cross the border to Germany and ended up in Hamburg. In the 50s you could take a ship to America in exchange for you working for them for a couple of years afterward in America. Escaping from his home country he only took the bare minimum. Waiting in the line for the ship to America he only had one suitcase with him. Suddenly he heard his name. Turning around an old friend from Tschechoslowakia waved to him from the line next to his. His friend Sam was going to Australia. „What are you doing in the wrong line?“ asked Sam. Without any doubts, John switched lines and joined his friend’s line. He was now going to Australia. After the long journey, they arrived in Melbourne. It was raining and he got soaked waiting to get off the ship. He walked down the ship ramp with his suitcase. Suddenly the handle ripped off and his whole suitcase fell into the water between the ship and the pier. Having a cardboard suitcase was common, and paper does not withstand water. Now John was in Melbourne with nothing. To payback for the trip, he now had to work in a coal mine. But after a couple of months, he ran away and looked for real work. He then worked in Real Estate where my friend met him. John must have been a great guy. He was a fly fishing teacher later in his life. Once he was trying to catch a big fish which was swimming close to the shore. Placing the bait directly in front of the fish was no problem for him. But the fish did not care. So John changed the bait. Again, the fish did not care. Throwing the fishing rod to the ground he ran into the water and kicked the fish on land with his foot. My friend looked dazzled and John just said „This has never happened to me before.“
I can’t even imagine packing my things in a single suitcase and just leaving home, never planning to return. Deciding to go to Australia instead of the USA in a couple of minutes seems to be even more insane. Having the grit to just run away from the shitty job he promised to do to repay for your journey when he had noting but his clothes. Crazy story. Great guy.
Listening to that story, I felt amazed. Amazed by how much the world changed. Amazed by how bad Johns’s situation was and what he made of it. And I guess that there are still people born today who need to undergo such a burden because of wars, political persecution, or other gruels, we from the „West“ think are gone.
Three sides of risk
When you take a risk there are three sides to it. The odds you will get hit, the average consequences of that, and the worst possible consequences of getting hit. Thinking about the first two is easy and done by most people. However, imagining the worst possible outcome is often overlooked. But ignoring this tail-end risk could change you as much as Morgan Housel. The Three Sides of Risk. In investing in stocks the worst possible risk is the complete loss of all its value. I think if you invest in stocks you should be aware of that and be in a situation where you could tolerate this loss. Even if it is uniquely. It is possible,
However, analyzing the worst-case risk can also help you to do things you are afraid of. Imagine the worst outcome of your feared decision or dreams. If they are nor live threatening (which most decisions are not) you can risk exposing yourself to failure. Else you don’t know what you can possibly achieve.