In the last few decades all investors have had to worry is about how economically safe our assets and shares are.
How risky is the Commonwealth Bank of Australia (ASX: CBA) loan book? What direction is the Telstra Corporation Ltd (ASX: TLS) average revenue per user metric headed? These are not world-changing issues.
Warren Buffett has long said that CNBC is the area that he worries about the most. Not the TV station, but the threat of chemical, nuclear, biological or cyber attacks.
Those types of attacks are ones that can utterly alter life as we know it – imagine if one of Australia's major cities were to be attacked. But that has always seemed like something from an action movie.
But this week a 'James Bond' movie script became reality – Saudi Arabia's oil facilities came under attack by drones. Perhaps it was Yemen rebels that did it, perhaps it was Iran. Either way, the global oil supply was hit, causing the oil price to jump over 10%.
The Middle East has always been a volatile area that could cause ripples in the global economy. The success of the attack could encourage other attacks of a similar nature on other types of facilities in the future.
I'm not surprised that Aramco is thinking about delaying its IPO.
Whilst the likelihood of a seriously-damaging terrorist attack is small – particularly against Australia – it's worth thinking about how safe your shares and assets are in the low probability events. The GFC did happen and caused many northern hemisphere banks to go under. The tech crash did happen 20 years ago and some of those high-flyers did go out of business.
Diversification is increasingly important in this ever-changing world to mitigate the risks. Some companies are benefiting from the growing importance of cyber protection such as the businesses in the Betashares Global Cybersecurity ETF (ASX: HACK).
For my own portfolio, I'm trying to avoid shares that are too dependent on one asset, one location or one brand. Businesses that can offer a diverse group of high-quality segments are worth owning such as Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Altium Limited (ASX: ALU), Alphabet and LVMH.
