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Houston, We have a Problem!

Updated: Aug 17, 2021

This is the picture I took when I visited Houston space center last week.

Among all the missions, Apollo 13 was the special one: it was a successful failure.

The Crisis

Two days into the mission, an explosion happened in the oxygen tank. "Houston, we've had a problem ..." Commander Jim Lovell reported gas venting from the spacecraft.

Without the oxygen, the fuel cells cannot generate the electricity needed by the Command and Service Module. It became clear that the Command Module Odyssey needed to be shut down, saving the limited power it had left for reentry into Earth’s atmosphere.

The Solution

Once the Command Module was shut down, the Lunar Module was used as a life boat. The Lunar Module had a 45-hour lifetime that needed to be stretched to 90 hours. This was the only Apollo mission aborted after launch, and marked the ONLY use of a Lunar Module to provide emergency propulsion and life support after loss of the Service Module System.

How does This Relates to Investment?

The example clearly demonstrates the importance of risk management. There are two metrics to measure risk: 1) frequency (how often it happens?); 2) impact (how big is the loss?). The fact that tail events do not happen every day does not deny the importance of risk management. Lunar Module was used only once among 12 Apollo missions, but we can’t get rid of it, as the impact is too big.

This example also shows that risk management has to be in place BEFORE any disaster happens, as no one can predict when the disaster will happen, and when it happens, you don’t have time to manage risk on the spot, if you haven’t built it. Some investors think right now it’s not a good time to diversify the portfolio, as the stock market is performing very well. Make no mistake, I am not saying you should sell stock and buy recession-resistant assets, all I am saying is that given the uncertainty, your portfolio might be better protected if you have both “risk-on” assets and recession-resistant assets. How much weights to assigned to different assets depends on your assessment of the probability of different scenarios.

How does our ATM Deal Manages Risks?

Here is a 5-mins video summary why you should invest, and how does it compare to other asset classes. click on this link or the photo below. If you are interested in investing in this recession-resistant asset class, please send us an email or schedule a quick call with us. We can discuss your situation and see whether this is a good fit for you.

The July raise for ATM fund is now OPEN. It will be closed on 7/15/2021.

Have a great weekend!

Invest with Confidence.

Yan Yan Sharpe Investor Group Want to invest for passive income? Click here

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