Antifragile — What Trump and ISIS have in common
Both Trump and ISIS are benefiting from a phenomenon known as “antifragile,” a term coined by author Nassim Taleb to describe things that gain from disorder. Something that is anti-fragile, opposed to resistant or robust, bounces forward after an attack. In other words, the more you attack something that is anti-fragile the stronger it becomes.
Nassim Taleb uses antifragile to describe how he made his first fortune in the stock market by trading out of the money options. Options are the right to purchase or sell a stock at a fixed price over a fixed time frame. Out of the money options are options that are so far off the current price of the stock that they are considered to have little or no value. The only way out of the money options gain value is when the stock price comes under an immense attack, causing a massive fall in the price. Price crashes in the stock market tend to cascade into a cyclical, catastrophic sell off as the news of the crash feeds the fear of a bigger crash. Out of the money stock options are antifragile, if the market remains stable they are worthless, but if the market crashes, the return on investment from out of the money stock options are typically triple or quadruple digits. Nassim Taleb made his fortune on the stock market crash of black Monday in 1987 with out of the money options.
So what does anti-fragile have to do with Trump? The more his opponents attack him, the higher he rises in the poles. His unconventional statements bring harsh retributions by his opponents, simply putting him back in the spotlight. It’s the traditional cyclical media loop; the more Trump is attacked, the more he is followed in the media, and the higher his poles rise.
Any publicity is good publicity.
Competitor Jeb Bush, shocked by Trump’s success, called it a “phenomenon,” claiming Trumps ability to “appeal to people’s anger” as the reason for his accomplishments. But just by mentioning Trump’s campaign, Jeb Bush is fueling the fire. If left alone or ignored by the opposition, Trump may become irrelevant. Trump has become antifragile; the more he is attacked, the stronger his campaign grows.
This phenomenon is not much different from strategies employed by terrorists. The primary goal of terrorists is not to kill or destroy, but rather to evoke a response. The acts of terror (killing/destruction) are simply a means to an end, the response. For example, the more we engage with ISIS the more news coverage they receive. The more news coverage ISIS receives the easier it is for them to recruit foreign fighters. Simply put, terrorists have always been antifragile, using acts of terror as a catalyst for a response. Unfortunately, terrorists are the only ones that seem to understand that the opposition’s response only helps their cause. Terrorists understand they must stay under attack in order to stay relevant. Once the response stops, terror groups become irrelevant, losing prestige and the ability to recruit. Just like out of the money stock options and controversial political candidates, terrorists count on fear-based responses to fuel their growth.
The lesson to be learned from Taleb’s antifragile concept is situations that feed on fear are best left alone to atrophy under their own weight. If we want to avoid violent stock market crashes and strengthening terrorists groups like ISIS, we have to learn to control our fears and insecurities. Trump, options traders, and terrorists are all betting on the same thing, that we over react to events.
This message brought to you by the homeland security professionals of Homeland InSecurity.
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