December 17, 2021

Recent events have offered strong reminders of how fragile economic ecosystems can be. The pandemic has badly hurt a lot of businesses, not to mention the people who have gotten very ill. Last week’s saga of the Suez Canal blockage is just another example of a grey rhino.

The Suez Canal is a key choke point in global trade, and closing it off for a week caused severe economic strain on many companies. Just-in-time supply chains are clearly getting a lot more scrutiny after this past year of stress-testing. There was a lot of inventory, suddenly forced to sit idle because of a single freak accident.

It’s always important in business, and life, to learn from past experience. Certainly affected companies will take a serious look at whether there are any lessons to be learned and go-forward changes to implement.

We’ve seen from recent years that bad surprises always come, eventually. It’s up to us to avoid repeating past errors and be ready to bounce back quickly.

There’s an old saying that anything that doesn’t kill you makes you stronger. I don’t know if that’s entirely true, but there’s certainly a valid point in there.

At Alliance, we think a lot about the many ways things can go wrong. We’ve built an investment strategy that has proven remarkably resilient in the face of big economic disruptions over the last few years.

This applies as much to life as it does to business. We all have to make a lot of risk/reward decisions in our lives. We should remember to count our blessings and expect the unexpected.

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