The Biggest Oportunity In History (part 2 of 2).

February 13, 2008 in black swan, climate change, energy

In a previous post I briefly introduced the concept of a “Black Swan”- a rare, unpredictable event beyond the realm of normal experiences that people have a hard time understanding.

OK, background out of the way, here goes my addition to this conversation. I believe that one of the most significant black swans in history is looming over us and the spectacular thing is that we know all about it: climate change induced by anthropogenic carbon dioxide emissions.

A defining characteristic of a Black Swan is that it is unpredictable. So the most strict sense, some people might argue that climate change doesn’t count. But it does for every other reason- the fundamental cognitive failures that are causing us to double guess the science, to put off taking it seriously, and to not price in catastrophic disruptions to the world’s economy in present day markets are exactly the same cognitive failures that Taleb spends an entire book describing.

So we know its coming, we know from Taleb that people will ignore it and mis-price all the way to last possible minute, my question is- how can one profit from it? (before jumping all over me about that, here’s my basic approach- it’s going to happen, I can’t do anything to stop it- probably no one can- so I ought to prepare myself in the best way I can).
Yes green energy is hot these days. But I’m looking for things more fundamental than somewhat faddish popular memes. A change is coming, maybe one of the biggest changes ever- where are the massive fortunes going to be made (and lost!) ?

If I figure it out, there might be a part 3!