Hopefully you can draw something useful out of this metaphor.Yesterday we had a fire training where the plan was to pull out a couple of Type 6 trucks (pick up truck with fire equipment like you see pictured to the left) and a water tender (big truck with 2000 or more gallons) with the intention of executing a hose lay (a network of hoses that is usually used to flank a wildfire) with hose packs and spraying some water.
We do this at least once a year for training so that if we need to do it for real it is a little fresher in everyone's mind. One thing about fires is that there is a lot of chaos and invariably at least one or two things will go wrong on an incident, this is unavoidable. Additionally we are all volunteers so it is not like we fight a dozen big fires every summer.
It would be a waste of time to try to prevent something from breaking or otherwise going wrong beyond doing our normal preventative maintenance. Past incidents allows some of the more experienced of our group to quickly figure out a work around that can be effective and safe. This comes from understanding how the equipment works, how the water moves through the plumbing, the nature of fire behavior and so on.
We had two malfunctions during the drill yesterday. The water tender just shut off while it was running. The truck needs to run in order to feed the Type 6s via its pump. This is exactly the type of thing we need to be prepared for. There are two immediate fixes had we been out at an actual fire. One just call out the other tender, hopefully driven to the scene by someone who might be able to diagnose the problem, and the other would be to move the Type 6s to lower ground and feed them via gravity which would be doable in many places in our area.
The other problem we had during the drill was that the plumbing on one of the Type 6s sprung a leak. It was still able to pump water with plenty of pressure so it was ok, usually this is a loose fitting somewhere which turned out to be the case so the engineer just needs to again understand how the truck works when a problem comes as opposed to predict the problem. Another work around for a broken pump on a Type 6 is that a functional water tender can act as the pump. There is a way to bypass the pump on the Type 6 and push water out as needed. This is not preferable but it works.
The key to this stuff is understanding how things work so that there is no panic when things don't go exactly as planned.
7 comments:
Hey Roger, good morning. While I appreciate your post as a metaphor for financial planning, what it brings to mind immediately is the Gulf oil disaster. Obviously, BP didn't have the kind of forward-thinking contingency plans in place that you practice, though I wonder if any company can adequately plan for catastrophic events like this. I hope boards everywhere are asking hard questions.
Roger, I'm reading Supercycles, by Arun Motianey. It's an excercise for me that is similar to the one you use in the blog. He concludes that inflation of some magnitude is a forgone conclusion to handle the global financial crisis (and he did not foresee the crisis in Europe in his book). Based on the 70's, his investment implications are the opposite of what is the popular plan of today. He recommends concentration in energy( oil and gas), keeping cash for bargain hunting, TIP's,dividend only investments, and avoid diversification. I'm not suggesting he's any more correct than anyone else, but it raises the point that your plans are a result of your assumptions. Your assumptions about the future are perhaps more of a driver for your returns than your actual choices for investment vehicles.
Sam
A 1970's inflation fund would be T. Rowe Price New Era (PRNEX) which is 2/3 energy and the rest in other hard asset producers. Interestingly small value did well in the 1970s.
Hi Roger--Thomas Smicklas has a timely article on Seeking Alpha about building a Permanent Portfolio using etfs. Insofar as the porfolio is comprised of "longterm investments theoretically assembled to account for the unexpected," it seems especially pertinent to your post today.
I'm curious if you've read it, and, if so, what your take is. On a non-analytical gut level, it makes my palms sweat a bit as it bears almost no relationship to my portfolio whatsoever.
Thanks very much.
very funny, I am working on a critique of that post for tomorrow.
Roger,
Talking about firefighting, I was curious what you think of all the posts by guys like Mish about outsourcing fire departments. As a volunteer, you probably have an interesting take. Do you think more work could be picked up by volunteers or is creating a private sector fire department feasible.
I have several family members in firefighting. One cousin has been in the force for ten years now and has yet to see a fire (in Colorado Springs). He has been an expensive paramedic. Sprinkler technology and the demise of oil burning heating systems have lowered the number of fires, yet the forces haven't shrunk.
Just interested in your take.
my take may not be that interesting but...
I don't have the stats but the vast majority of departments are volunteer departments. I can't really envision how a volunteer FD could function in a large city however and I;m sure the number of fire fighters (so people not departments) are paid and work for big city departments.
one model of course is privatizing they way that Rural Metro that I believe is called subscription based service. this is controversial in that they will not take action at a house that has not paid.
what I do know is that many departments have capped out their tax assessments, then go into debt to keep building up and then they fail one way or another. the political ambition is very dense in the running of departments.
it really is a far more complicated thing than I think many people realize.
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