Fragile vs. Antifragile Investing (What Is Antifragile Investments – An Antifragile Portfolio in 2024)

Nassim Nicholas Taleb invented the word antifragile in his book with the same name when he was looking for the opposite of fragile. Antifragile is relevant for investors. What is antifragile investing? In this article, we look at how you can judge your investment: is it fragile or antifragile?

An antifragile investment is something that can benefit from shocks, randomness, and disorder. We view Amazon and Berkshire Hathaway as such investments. We discuss antifragile investing and investments.

Fragile – handle with care:

Fragile is defined as an object easily broken or damaged. When you order something online that is fragile it most likely is labeled as “handle with care”. The reason is pretty obvious: it can’t sustain shocks, knocks, beating, or being dropped to the ground.  It easily breaks apart. The opposite is antifragile:

Antifragile – do not handle with care:

Nassim Nicholas Taleb wrote a full book on the opposite of fragile: antifragile. I quote from his book:

Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure , risk, and uncertainty. Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it antifragile. Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better…….Antifragility has a singular property of allowing us to deal with the unknown, to do things without understanding them— and do them well……It is far easier to figure out if something is fragile than to predict the occurrence of an event that may harm it. Fragility can be measured; risk is not measurable (outside of casinos or the minds of people who call themselves “risk experts”)

Taleb stresses that antifragile is not the same as robust/resilient. A rock or diamond is robust, but they just are – they don’t gain from stress and volatility like an antifragile object.

For example, I would label the tobacco, alcohol, and brothel industries robust and resilient. Despite recessions, shocks, and changes in consumer preferences, they have managed to withstand the test of time – like rocks. There will likely be a market for these products, either because they are addictive or serve a need for human nature (brothels). They are little exposed to disruption.

Amazon and Google/Alphabet are antifragile

However, being antifragile can make a business evolve into something much stronger and better than simply being robust. Most likely such a company derives its antifragility from its culture, not products or services. Amazon is partly an antifragile company.

The coronavirus is spreading from country to country, but I believe Amazon can benefit from the virus. Amazon doesn’t rely on customer visits –