1/ There are lots of quality companies, but few are what @nntaleb calls antifragile.

Imagine a box. When shaken the contents are not only protected but grow stronger. Antifragile businesses benefit from volatility.

I want to own these.

2/ What are the characteristics of an anti-fragile business?

3/ It is appropriately financed. It can be levered but debt must be structured in a way that it can’t be called at inopportune times.

Long maturities and non-recourse debt create layers of protection.

4/ It has many options for investing capital.

$LUK through the 80’s and 90’s is an excellent example - Cumming & Steinberg were vultures, purchasing distressed assets in a variety of industries. A larger playing field increases the odds of success.

$BAM is a modern example.

5/ It gets stronger as it gets bigger. Many traditionally-run businesses are too centralized and do the opposite, collapsing under their own weight.

During stressful periods, scale advantages, regulatory capture and network effects widen the gap with competitors.

6/ Shareholders are long-term oriented. Their actions help determine the cost of capital which is critically important during a crisis when cheap capital is scarce and immensely valuable.

7/ Perhaps most important - management is unusually skilled at allocating capital and can move quickly.

High return opportunities don’t last long.

Ex) Malone & $SIRI, Buffett / $BRK buying $BNI or Flatt / $BAM investing in $GGP. Once the dust settles the opportunity is gone.

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