Goldilocks and Barbells

Most children learn the story of Goldilocks and the Three Bears. Goldilocks finds the bears’ home, and tries out random things there. Pretty much for everything she tries, there will be three versions (each belonging to one of the bears), with one being <too extreme>, the second being <too extreme at the other end> and the third being “just right”.

The basic message can be summarised as “extremes bad, means good”. In fact, even if you didn’t learn the story as a child (I didn’t), the message of “doing everything in moderation” gets impressed upon you from various quarters. “Don’t eat too much, don’t eat too little, eat in moderation” is possibly the most prominent example of this.

And in some way we have all internalised this messaged. That both too much and too little of everything is bad, and it’s the middle path that is the right one.

And then on the other side, a concept that has always existed but formally articulated fairly recently, is the “barbell“. First articulated by Nassim Nicholas Taleb as an investment strategy, it talks about investing in a combination of extremes and eschewing the means. In Taleb’s original case, it was about an investment strategy that is a mix of low-risk bonds and high-risk (long) out-of-the-money options, that together give a low-risk winning portfolio in the long run. This ran contrary to “modern portfolio theory” that tries to get a mix of assets that maximise expected returns and minimise standard deviation (note I’m saying standard deviation and not “risk” – they’re not the same).

And this strategy applies pretty much everywhere in life. There are a lot of things where the only way you can benefit is by “being all in”. Doing things in moderation can actually be hurtful, and combinations that have a “little bit of everything” can be suboptimal to a simple superposition of extremes.

My breakfast is a barbell, for example. I either skip it completely (nearly zero calories from black coffee only), or have a big breakfast with at least two eggs. A light breakfast completely messes up my day.

My exercise is a barbell (no pun intended). I either lift heavy weights (attached to a barbell) or do nothing. Exercises with light weights make me feel miserable.

In my nearly eight month long return to corporate life, I haven’t taken many days off. My philosophy there is that if I take off, I should be able to completely take off (no “one email here”), and have done so only when it’s easy to do so.

You can think of corporate strategy and a company’s focus being a barbell.

The list goes on. The point is – life is full of barbells, or we can make the most of life by using barbell strategies. Do either this extreme or that extreme, but don’t get confused and do something in the middle.

The problem, however, is that we get brought up on goldilocks, not barbells. And think that the middle path is superior to the extremes. It isn’t always so.

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